The Role Timing Plays in Your Decision to Buy a Franchise

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Close up on a conceptual clock with the text too early, too late, and on time. Concept of timing and choosing the right moment. — Close up on a conceptual clock with the text early late and on time. Concept of good timing and choosing the right moment. 3D illustration.

Olivier Le Moal/Getty Images/iStockphoto

Supposedly, timing is everything.

But is it important when you’re buying a franchise?

Let’s find out.

Timing and Franchising

Buying a franchise is an investment. Specifically, an investment in your future.

That said, it wouldn’t be unreasonable for you to want to look at investing in a franchise the same way someone who’s involved in the world of finance looks at investing. For example...

<blockquote>“Buy low and sell high. It’s pretty simple. The problem is knowing what’s low and what’s high. – Jim Rodgers, American investor, and financial commentator

Makes sense right?

In franchising? Absolutely.

Sell High: Huge Stock Market Gains

According to YCharts.com, as of April 2021, the S&P 500 two-year return was 41.94%. (The S&P 500 two-year return is the investment return received for a two-year period, excluding dividends, when holding the S&P 500 index.)

For the purpose of this post, if a portion of your money was invested in the U.S. stock market for the last couple of years, you were able to keep your job, and you kept your household expenses in check, you may be positioned right for franchise business ownership.

And based on the number of calls I’m getting, evidently a lot of people are in pretty good financial shape now.

In fact, it looks like today’s franchise buyers are thinking about selling high, so they can invest in a franchise this year.

Is The Timing Right?

If you’ve been thinking about becoming the owner of a franchise business, the timing may be right.

That’s because in addition to the financial gains you’ve made (enabling you to potentially sell high), the potential is there for you to buy something low. Specifically, real estate.

Commercial Real Estate Availability and Affordability

It’s a buyer’s market.

That’s because of the impact of Covid-19 on the commercial real estate market.

Now I realize that every market is different, but generally speaking, there are a lot of empty storefronts across the country. That means that landlords are not getting the number of monthly rent checks they’re used to seeing. As a result, they may be willing to negotiate their terms more.

In a nutshell, if you can find a good location for your franchise business, along with a landlord who’s willing to give you a substantial discount, so she can fill her year-long empty space, you could save thousands of dollars a year in rent. What would that mean for you?

Your business could hit break-even quicker, and along with it, profitability!

Is It Time to Invest In a Franchise?

Based on the money you (hopefully) made in our high-returning U.S. stock market, and the potential for you to lease a commercial space for less money you could have pre-Covid, my answer is a resounding yes. Provided you:

Have enough money upfront, and enough money set aside for living expenses during the initial start-up phase of your franchise business
Communicated openly about your desire to be your own boss with your spouse or partner
Have made a good choice in a franchise
Applied the best research techniques to get all the facts on the franchise you’re thinking of buying
Hired a competent Franchise attorney to go over the FDD and the Commercial Lease
Are prepared to work hard in your business

Briefly, if you have the money, have done the needed homework, have the support of your family, have consulted with an attorney, and are prepared to make a real go at being the owner of a business, a serious look at franchise ownership is now warranted. But there’s a catch.

We don’t live in a perfect world.

In view of that, you need to be careful. And smart.

But if you do an excellent job gathering the facts about the franchises you’re interested in, and keep your eye on the ball, your timing may be just right.

The Franchise King®, Joel Libava, is a top franchise expert. He’s written over 2,000 different articles on franchise ownership and personally consults with people who are looking to buy a profitable franchise. Go here to find out how The Franchise King® can help you become your own boss.

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