Turnkey Solutions: A Guide to the Intrepid Franchisee

Turnkey packages provide a near- or fully complete features of a working enterprise. Although they come with a higher price tag, a turnkey enterprise reduces much of the initial startup challenges faced by many franchisees. One of the easiest (relatively speaking) ways to get into a business is to acquire a franchise. Typically associated with food ventures such as fast food outlets, franchises can encompass a broad assortment of other products, including fashion. Although not without its own set of challenges, franchising eliminates the difficulty of establishing a recognizable brand. In addition, many franchising companies often sweeten the pot by offering turnkey solutions—providing all the equipment and stock needed to start their new venture almost immediately. Whether a restaurant chain or a clothing store franchise, a turnkey business would naturally cost more than their counterparts but will also eliminate many of the challenges faced by businesses in their startup phase. Many franchising companies offer turnkey solutions that essentially provide an entire store’s worth of equipment and supplies that would only need to be housed. Others provide an entire established location ready for acquisition.

A Ready-Made Enterprise

A turnkey enterprise is one that is ready to function once acquired. The most familiar types of turnkey enterprises are those that are sold by their original owners, followed by those owned by franchisees. The term comes from the ready-to-go nature of a complete turnkey enterprise; once the transactions are finished, all you need to do is open the door. Turnkey enterprises cost more up front, but in many cases can start facilitating cash flow almost immediately. Buying pre-existing businesses requires the proper due diligence to ensure that the enterprise is in a good-enough state to acquire with little fuss. In many cases, the original owners of an enterprise sell an otherwise flourishing business as part of a Purchasing an existing enterprise from a franchise may require a much higher up-front cost, but are often a lot more secure an investment since the brand is already well-established. In the case of franchises, having turnkey operations is part of their assurance of brand consistency. Providing much of their materials allows their franchisees to deliver the expected product and service quality from the get-go. Most businesses offered by franchisers are partial turnkey enterprises, which leave the final steps (hiring employees and selecting locations). Occasionally, franchisers would also sell complete turnkey businesses, which would only need to be purchased.

Turnkey Advantages

A good turnkey enterprise for sale would involve a fair price for all the components plus the fee to put them all together, without any unreasonable markup. The appropriate due diligence is key to identifying whether a turnkey business is worth acquiring, and if you are the right person to take over its operations. Once you’re satisfied with the state of the business and are ready to acquire, you would then need to prepare what is needed to seal the deal. Purchasing a turnkey franchise or a pre-existing business several vital advantages over starting from scratch. First off, you do not need to cover the mounting costs of starting an enterprise from scratch. You also have the opportunity to begin managing the enterprise’s operations immediately and gives you access to returns almost instantly. From there, you can immediately start focusing on increasing customer volume and improving cash flow. A pre-existing franchise put up for sale also has the advantage of already having a ready-made customer base available. The focus of the new owner should, therefore, be toward improving customer experience and increasing revenue.