Why Accredited Investors Make Excellent Multi Unit Franchise Owners?
No one is stopping you from owning several franchises at once. Actually, this is called the multi-unit franchise ownership and is a pretty common thing in the world of business. Every investor who has enough money can invest in any kind of franchise, as long as they don’t contradict the rules and clauses laid down by the franchise companies.
It’s a great idea to invest in several different franchises because it guarantees profits from different sources. If one of those sources fails to deliver the kind of profit you expect, the others probably won’t disappoint you. This makes multi-unit franchise ownership a great choice for those who wish to remove the word bankruptcy from their dictionary.
Although literally, anyone can become a multi-unit franchise owner, for the sake of your business’ future, it’s best to get accreditation. The fact is that accredited investors do much better in the business universe than their non-credited counterparts. Furthermore, most of the successful franchise systems choose to do business exclusively with accredited investors.
And the reason why this is the case will become apparent as soon as you learn what the term ‘accredited investors’ actually means.
Accredited Investors vs Non-Accredited
The fact that an investor is accredited tells the franchise companies that he/she is serious when it comes to business. Considering that the accreditation is given by a government’s financial body, it’s a sort of guarantee that the investor won’t take the money and run or try to pull some other scheme that could hurt the franchise.
Although it’s not a strict rule, accredited investors tend to have a better business record than their non-accredited counterparts. They also tend to have more experience in the franchise business, better education, a wider network of friends and associates, and so on.
Whether you can become an accredited investor depends on your business success and your financial situation, but also on your country’s laws and regulations regarding investing. For example, Americans have to fulfill a number of conditions in order to become accredited investors, including things like the following:
A net worth of minimum of 1 million dollars (the value of the investor’s primary residence does not count towards this)
A yearly income of at least 200,000 dollars for at least two previous fiscal years (or 300,000 dollars in total if married couples are in question)
A reasonable business plan, suggesting that the investor will keep on making profits in the upcoming years
These are just some of the most important rules used by the U.S. Securities and Exchange Commission (SEC) to decide if a person is suitable to become an accredited investor. If you’re still not one, it definitely pays off to put in a little bit of effort and get accredited. After all, accredited investors have a successful franchise at their disposal at any given moment, which just isn’t the case with those who aren’t accredited by the SEC.
Investing in Successful Franchises
There are plenty of lucrative franchises for investors, which can bring them a steady income over the years. But, there are other factors that come into play when it comes to deciding what to invest in. It’s not just about making big profits, but also about the lifestyle of a successful businessperson.
Accredited investors can afford the luxury to mix business and pleasure by creating a multi-unit franchise system consisting not just of big-profit-making businesses but also of their hobbies. For instance, many successful investors own racing horses, airplanes, yachts, etc.
They also have the freedom to invest in businesses following their guts, even if the reason says differently. After all, the multi-unit franchise ownership makes these kinds of risks less dangerous.
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