Thinking About Franchise Ownership in Greater Hudson? Here’s What to Know

If you’re thinking about getting into franchise ownership, there’s a lot to consider before taking the plunge. After all, franchising can be pretty complex, from the pros and cons of ownership to writing a business plan. In this article from your friends at the Greater Hudson Chamber of Commerce, we'll cover everything you need to know about deciding whether to open a franchise so you can make the best decision for your aspiring business.

The Pros and Cons of Franchise Ownership

Owning a franchise comes with a unique set of pros and cons. It's important to consider both the positives and negatives of franchising before making your final decision.

On the plus side, one big advantage is that starting a franchise carries less risk than starting your own business. This is because franchises are already established brands with an existing customer base. And since franchisors already have name recognition, you'll have access to marketing resources that you might not if you were starting your own business.

But on the downside, owning a franchise also means that you'll have less autonomy than if you were running your own business. Franchises are required to follow certain guidelines set by the parent company, which can limit your creative freedom. Additionally, since franchises are already established businesses, startup costs are usually higher than they would be for new businesses. And because franchises are part of a larger company, you'll have less financial privacy than if you were running your own business. The parent company will want regular updates as well as access to your financial information.

If You Take the Leap, Choose an LLC

If you want to open a franchise, one business structure you might want to consider is a New Hampshire LLC. LLCs offer some significant advantages for business owners, including personal asset protection and tax benefits. When it comes to personal asset protection, LLCs help shield your personal assets from being seized by creditors in the event that your business is sued. This protection isn't absolute; in some cases, creditors may still be able to go after your personal assets, but it does offer some extra peace of mind.

Additionally, LLCs offer pass-through taxation, which means that any profits or losses made by the LLC are "passed through" to the individual members of the LLC and taxed at their individual tax rates. This is different from corporations, which are taxed as separate entities at corporate tax rates. Working with an online formation service is an easy and affordable way to set up your business’s LLC designation.

You Need a Business Plan

If opening a franchise is the right move for you, it's time to start writing your business plan. A good business plan will outline your goals and objectives as well as provide detailed financial information about your proposed franchise location.

When writing your goals and objectives, be as specific as possible. Rather than saying, "I want to make money," say, "I want my franchise location to generate $X in sales within its first year of operation." If you have any previous experience in the industry, be sure to mention it here as well.

Next, provide detailed financial information about your proposed location. This should include information about startup costs (such as franchise fees), operating expenses (such as rent and utilities), and projected revenue. If possible, include information about any financing arrangements you've made or intend to make, such as loans from family and friends or investments from venture capitalists, as well as information about how these funds will be used. Finally, include any relevant market research about the franchisor or the industry in general.

Franchise ownership isn't for everyone, but the rewards can be a highly lucrative business partnership. Take stock of what goes into owning a franchise before you make the leap so you know exactly which path to take. Good luck!

If you’re looking for local resources and advocates that will help you build your business in our community, look no further than the Greater Hudson Chamber of Commerce. Join us today!