Is a mobile franchise worthwhile for prospective franchisees hoping to start their own business, or will these operations leave owners spinning their wheels?
Life on the open road can be lucrative for the right franchisee if he or she has what it takes. Practically any line of work can go mobile – from dog grooming to home repair to a litany of delivery services – but this freedom alone has the power to entice franchisees before they really perceive the whole panoramic view through the windshield. Check out these important factors before deciding to take to the streets with your brand new mobile franchise.
Low upfront costs – but hidden expenses throughout
Obviously, mobile franchises avoid expenses typically associated with traditional franchising. Stephen Caldeira, CEO of the International Franchise Association trade group, told the Wall Street Journal while the cost of opening a storefront franchise location hovers closer to the $1 million mark – give or take a few hundred thousand – mobile franchises working out of vans or trucks can cost less than $150,000 to get started. Depending on the business, some only cost half or a third of this sticker price.
That said, mobile franchises may require extra space for storage and administrative operations that can't be done out of the back of a truck. As such, franchisees might have to fix up a home office or rent storage space, two costs they may accidentally overlook in the initial stages.
Mobile franchisees must be masters at parking
The joys of travel open mobile franchises to a larger customer base. Essentially, these franchisees are only bound by the amount of gas in their tanks. But this "here today, gone tomorrow" business model can make it harder for these businesses to keep revenue consistent, especially when it comes to food service. How can customers return for seconds if the franchise is constantly on the move?
Small Business Trends recommends becoming an expert in your area's parking laws, as well as applying for local permits that will allow franchisees to conduct business in public places. Once these things are in order, franchisees should try to create a regular schedule and post information online to keep customers informed. Moreover, while finding an open spot can be a hassle, paying parking tickets and fines will eat directly into revenue.
Equipment and franchise industry piece brought to you by Marlin Equipment Finance, a nationwide provider of commercial lending solutions for small and mid-size businesses. Marlin's equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which include manufacturers, distributors, independent dealers and brokers in the security, food services, healthcare, information technology, office technology and telecommunications sectors.