
Get exclusive money-saving offers and guides
Straight to your inbox
Updated
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
A franchise business is similar to any other start-up business in a lot of ways, particularly from the point of view of a customer or client. But from the point of view of a business owner or franchisee, a franchise business has an entirely different structure to a traditional business.
The franchise business model allows franchisees to utilise the branding, products and business structure already established by the franchisor. Rather than reinventing the wheel, a franchise business structure gives a franchisee a head start to running their own successful business, capitalising on the existing success and brand recognition created by the franchisor.
However, there are potential downsides to a franchise business structure, not least of all being the start-up costs and ongoing royalties that must be paid to the franchisor in return for the use of their existing branding, products and/or services.
In Australia, franchise business arrangements are regulated under the Franchising Code of Conduct. In addition, every franchise relationship must be set down in a franchise agreement, giving both parties the opportunity to fully understand the rights and responsibilities of both sides, and for franchisees to receive independent legal and financial advice before entering into a franchise arrangement.
A budget between $100,000 and $200,000 is considered an average or mid-range budget for a franchise in Australia, and will give a franchisee a wide range of choices when it comes to choosing the right franchise.
Before you begin looking for the right franchise for you, keep in mind that a franchise can be purchased in one of two ways. You could start a new franchise and build your business from the ground up, or you could purchase an existing franchise – one that has already been established by someone else – and run it as a going concern. With that distinction in mind, the following franchise businesses may be available to you with a budget between $100,000 and $200,000:
In the $100,000 to $200,000 price range, you will have a choice of franchises that depend on retail premises, as well as mobile franchises which tend to be placed at a lower price point.
The franchising system involves a sometimes complex set of fees and ongoing payments. Without a full understanding of the costs of establishing your new franchise business and continuing to run it for the length of the franchise agreement, you could become overburdened with costs that you may not have budgeted for.
Be aware of the following costs of franchising:
One of the most common mistakes that new business owners make, whether running a franchise or non-franchise business, is under-allowing for working capital. As mentioned above, your business will incur ongoing expenses similar to a non-franchise business, as well as ongoing royalty payments that must be made to the franchisor in exchange for the continued use of their brand name, branding and the business's reputation.
After making a large financial outlay to set up the business, many new business owners find themselves strapped for cash and unable to meet the ongoing expenses of the business. In other words, they haven't adequately allowed for working capital.
While it can be difficult to estimate the exact amount of working capital you will need to keep your business afloat, there are many resources you can utilise to give yourself a good idea of where to start. Consider speaking to existing franchisees in the business or industry you are looking to move into, and ask for advice from your accountant or financial advisor.
Most lenders will not allow for working capital in the loan amount, making it all the more important that you understand and properly budget for working capital for your new franchise, particularly in its first year when cash flow will be tight and revenue may be much lower than expected.
Most people looking to purchase a franchise in the $100,000 to $200,000 price range will need to apply for finance. When approaching a bank or other lender for finance to start a franchise, it is essential to be completely prepared well in advance, as well as being totally up-front and honest about your financial circumstances.
Consider the following when applying for franchise finance:
Be up-front and honest about your current financial situation, your financial history and your current outgoings, and you will be in the best position to be approved for franchise finance between $100,000 and $200,000.
When looking for finance to purchase a franchise valued between $100,000 and $200,000, you may have a number of options open to you.
$100,000 life insurance policies can be very affordable. Compare costs and cover here.
Interested in owning a Domino's franchise? Learn about the application process, franchise costs and other criteria for being accepted as a franchisee.
Want to own a pool maintenance business? Compare Poolwerx franchise loans now.
If you're thinking of buying a Subway franchise, find out what you'll need to do here.
BOQ offer a discounted variable rate for businesses looking to borrow more than $200,000.
Find out how to own and run your own McDonald's franchise, and compare loans now.
A 7-Eleven franchise gives you the chance to run your own business. Compare your finance options now.
If you're looking to buy an F45 gym franchise, compare your finance options here.
If you're interested in buying a Smartline franchise, find out what you need to do and how you can finance it.
If you're looking to open a gym, read our guide to opening a Plus Fitness franchise and learn how to fund your new business today.