Q: I’m thinking about buying a franchise, but I don’t know where to start. What should I know before I take the plunge?
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A: First things first — you’ll need to assess your financial situation. There are a few typical ways that new franchise owners pay for the initial fee and the costs it takes get the business up and running in the first year. These sources of financing include the total amount of capital from savings, raising money from friends and family, and tapping into a bank loan. Franchise fees range anywhere from $5,000 to $2 million, with $100,000 to $200,000 being the average range. If you’re planning on turning to your local bank for financing, be aware that banks still are somewhat risk-adverse, and that is limiting their willingness to lend. Once you know what you’ve got to spend, check out the International Franchise Association website to launch your intensive research effort. The IFA is a terrific resource to help map out the rest of your franchise plan.