A simple comparison of annualized costs can provide detailed insight into the value of a franchise investment.
New York, NY (PRWEB) May 20, 2015
Annualized Costs of a Franchise Investment.
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One of the leading causes of franchisee failures is undercapitalized franchisees. Being able to more accurately predict the financial requirements of a franchise investment and compare the results to available investment capital can lower the risk of being undercapitalized.
Studying annualized costs of a franchise investment is useful to support cash flow analysis and calculate debt payments for franchise investments. Understanding the annualized cost of a potential franchise investment can provide insight into the franchise investment risk and support the need for thorough due diligence.
There are significant variances in annualized costs between franchise sectors. This reflects the multi-faceted nature of business-format franchises in the current market and any analysis or comparative should be focused on similar franchise investments and business offerings.
Franchisors need to better understand how they compare to others in their sector and focus on the differentiation between them and their competition.
"A simple comparison of annualized costs can provide detailed insight into the value of a franchise investment." states Jeff Lefler, CEO FranchiseGrade.com.
FranchiseGrade.com is the leader in competitive market research and objective analysis for the franchise industry. Their franchise assessment, grading and standardized reporting tools provide industry stakeholders with critical data driven metrics to support the growth of successful franchise systems. FranchiseGrade.com works to raise the bar for market research in the franchise industry to build a stronger franchise community.