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Turn the Key—Open the Door—Start Making Sales
For people exploring the prospects of starting their own business, a strong argument for buying a franchise involves the “turnkey” aspect of things.  While not every franchise business opportunity is a turnkey business opportunity—more about that below—every franchise has the potential for making a grand opening an easy walk in the park for the owner, or at least a not-too-arduous stroll around the block.  The term “turnkey” refers to something that is ready for immediate operation.  When used to describe a business opportunity, it suggests that the new owner needs to do nothing more than turn the key in the front door, swing it open, and sit back while the customers pour in.  While it may not be quite as simple as that, the reality is not far removed.

Franchise Basics
When buying a franchise, the prospective owner has a lot of things on his or her plate.  A large number of franchise businesses involve real estate—either the construction of a stand-alone retail store or the leasing of space—plus a build-out or remodeling effort.  Additionally, equipment must be purchased, inventory acquired, and supplies stocked up.  A franchisee must look after all these arrangements, although most parent companies step in to offer some assistance.  For example, they will supply the name of a reliable contractor, most likely one who has already remodeled other franchise locations in the area and knows what to do.  They will provide a source for equipment—ovens if you’re opening a bakery or pizza parlor, washing machines if you’re starting a dry cleaning business, and so on—which may come with some reasonable volume discounts, since it’s probable these suppliers sold the same items to fellow franchisees in the past.  However, price negotiations take place between the supplier and the new owner, and the franchisee pays for everything directly.  This is why buyers are instructed to have X dollars available, above and beyond the franchise fee.

The Turnkey Franchise
Many corporations offer a turnkey franchise package that has a specific price tag.  In reality it should more accurately be called a partial turnkey business opportunity, since it’s a rare package that also includes the hiring of employees.  By selecting this option, however, the franchisee can expect nearly everything to be completed on his or her behalf.  Construction will begin, or a vacancy will be found in a high-traffic area.  Remodeling will bring about the proper franchise “look” and signage will be ordered and installed.  Equipment will be shipped and placed in their proper spots inside the business, shelves will be stocked, and even business cards will be printed.

Selecting the Right Turnkey Package
Turnkey business opportunities can be as varied as the number of franchisors offering them.  There should be no excessive markup by the parent company, since they’re making plenty of money off you in franchise and royalty fees.  The idea behind a turnkey business involves allowing a new owner to get started with a minimum of fuss, rather than making a huge profit for the home office.  The savvy buyer will ask the franchisor for a unit-by-unit breakdown and then compare those expenses to what it would cost to have the same work done in the open market.  A small markup should be expected, since the franchisee will find it immensely convenient to have everything looked after.  One way to make sure you’re getting a good value is by checking with other franchisees in the system that took advantage of similar offers.  If they felt the turnkey business they purchased was overpriced, they will certainly let you know it.  And price may not be the only consideration here.  The basic premise of turnkey business opportunities is how quickly they prepare you for your grand opening.  If the contractors chosen by the home office are unreliable, or if the equipment suppliers are slow to deliver, any benefit derived from the expense of selecting a turnkey franchise are negated.  If this is at risk of happening, you’re better off arranging for everything on your own.

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