Established Franchises…Why Buy a Previously Owned Business?
By kelly | April 4, 2018

If you are looking to start your own business and a franchise sounds appealing, you may have an alternative option you hadn’t thought of before: Buying a previously owned business from established franchises.

It turns out that 10 to 15 percent of franchise sales may actually be franchise re-sales, previously owned franchises. Franchisees sell their business for many reasons. They might decide it is time to retire, or they might have been so successful that they’d like to sell their extremely profitable business and move on to their next challenge. Some franchisees are not happy in the industry they have chosen and decide it is time to work in an industry that interests them more. For whatever reason a franchisee is ready to sell his/her business, it may mean opportunity is knocking at your door.

Why do people choose to buy previously owned or established franchises?

  • Potential to get to profitability quicker.
  • Faster route to income.
  • Established community acceptance and a loyal customer base.
  • Ease in making financial projections.
  • Starting with trained staff.
  • Starting with established suppliers.
  • Less of the “pains” you might experience with a start-up, such as finding a location, interior remodeling, and developing a client base.

When buying an already established franchise business, there are steps you must take to before you make a decision to buy:

  • Do your homework when it comes to pricing. You will have to figure out what the true value of the business is. Keep factors in mind such as leasing fees, length of lease, location, etc. These are important factors and can make or break your profitability. Also, you will probably have a larger upfront investment than if you buy a franchise you have to start up. This is mostly because you will be buying the goodwill of the business.
  • Trace economic trends, and in particular, trends within the industry you are planning to buy into. Even if the franchisee is able to offer you figures from last year, the market can drastically change from year to year.
  • As with any purchase, do you research about the franchise. Call franchisees and find out what they have to say about their businesses and the franchise system you are potentially buying into.
  • Find out what kind of reputation this particular franchise has. Talk to other franchisees, and speak to customers. Make sure the business has the type of reputation you would be proud to own.

You’ve made the decision to buy a franchise, which is one of the safest ways to own your own business. By considering the option of buying from established franchises, you will be able to skip the difficult start-up period, which most business owners go through.


Categorised in: