Turnkey Business

DEFINITION of 'Turnkey Business'

A situation in which a firm's high-level management plans and executes all business strategies to ensure that individuals can buy a franchise or business and only "turn the key" to begin operations. A turnkey business already has a proven, successful business model and merely requires investment capital and labor. Franchises are typically turnkey business, but any existing business that's already up and running successfully or a new business whose doors are ready to be opened could be considered a turnkey business.



BREAKING DOWN 'Turnkey Business'

Subway's sandwich shops are an example of a turnkey business. The menu has already been developed, the stores have already been designed, the employees' uniforms have already been chosen, marketing is already in place and consumers are already familiar with the brand. To open a new Subway franchise, an individual only needs to pay startup and operating costs for one store location, a franchise fee and ongoing royalty fees; he or she does not have to worry about the other major aspects of business development.

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