Reap the Rewards: Finding a franchise business that gets you to break-even faster
Maria Walton | Franchise Manager | Mister Minit
Many people interested in becoming a franchise business owner become very adept at weighing up the pros and cons of different franchise systems. There are many things that motivate one to choose one franchise system over another. Some have better lifestyle options, while others provide more support. The degree of financial return, also stands out as a significant consideration. We caught up with Maria Walton, Franchise Manager of Mister Minit, a franchise business model that specialises in the services of shoes repairs, key cutting, engraving and watch servicing to talk about the importance of franchise businesses monitoring key performance indicators and having a business model which will allow franchisees to reach their break even point faster.
It is important that franchisors provide financial guidance and education to help ensure franchisees understand the importance of regularly reviewing business plans and utilising key financial reports such as cash flow and profit-and-loss statements for profitable operation.
The findings of financial reports for a franchise business will allow you to make informed decisions and develop a more strategic approach towards improving your financial returns.
At Mister Minit, we monitor a range of KPIs (Key Performance Indicators) which allow us to provide our franchisees with monthly reports on performance in areas such as customer service, average spending, number of key jobs per hundred customers and sales. These reports provide our franchisees with information that helps them to set goals in key areas and maximise profitability.
"Being the owner, boss, and decision maker of a franchise business has the potential to be a more profitable investment than, for example, having a passive income source such as an investment property or share portfolio. Buying your own franchise business is almost never a passive investment because it requires an investment of both talent and money."
Being the owner, boss, and decision maker of a franchise business has the potential to be a more profitable investment than, for example, having a passive income source such as an investment property or share portfolio. Buying your own franchise business is almost never a passive investment because it requires an investment of both talent and money. With a sound business model and the right location the effort you put into the business will often directly impact your financial return, so you get out what you put in.
The Mister Minit franchise tends to provide a high return on capital with most franchisees breaking even within six to nine months of operation. Once profits start to flow in these can be reinvested back into the business to ensure future growth.
If, when evaluating your franchise business options, financial reward is your number one priority, keep an eye out for systems that will provide your future franchise business with the opportunity to reach the break-even point faster than the usual three years. These kinds of franchise business systems provide a lower risk in changing economic conditions. Identifying franchise businesses like these may take time, but it is definitely worth the effort in the long run.