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To Buy an Existing Franchise

Posted by webtech on May 14, 2015
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tax-dollars-300x186There are dozens of ways to make your business dreams a reality. If you’re looking for a reliable source of future income, easy access to initial financing, and a way that you can capitalize on established business networks, then you might consider purchasing an existing franchise.

Buying an existing franchise allows you to capitalize on established business relationships with vendors and advertisers, and successful franchises have a much higher return on investment than startups.

Reasons to Purchase an Existing Franchise

Purchasing an existing franchise can be a shrewd financial step for you to take as long as you realize that acting on preconceived assumptions about how the market works or, worse yet, sheer emotion, is not a recipe for success.

You’ll have to spend time investigating how the market works and how your potential investment – following through with the decision to purchase an entire franchise – fits into that market long term.

There are two primary reasons that you should purchase a new franchise – the franchise you’re considering was once a startup and it’s passed muster simply by virtue of its continued existence.

Secondly, you won’t actually have to accumulate any seed money or starting capital to get your own franchise off the ground since the existing franchise you’re considering purchasing has already proved viable.

While it’s important for a prospective buyer to consider every detail of a franchise agreement before making a buyout decision, purchasing a franchise offers training and great ROI for those willing to invest.

Investing in a Franchise: More Upside, Less Risk 

So, what’s the lesson here? While it’s true that startups have an uphill battle to climb, by purchasing an existing franchise you already have the odds in your favor.

Buying out an existing franchise is simply far less risky that undertaking your own, especially considering the time, money and energy involved in purchasing property, juggling employees’ salaries, building advertising networks, and dealing with regulatory issues. Even day-to-day logistics can prove harrowing for franchise owners just starting out.

Another advantage to purchasing an existing franchise over building one from the ground up is that you can bank on previous success while drawing strength from the benefits of a fully-formed business network.

Having said that, buying out an existing franchise puts you in the driver’s seat in the sense that an established network already has time-tested management practices, national advertising affiliations, and a proven branding image for you to expand upon.

The fact that franchises also have great relationships with vendors and manufacturers, possible customer loyalty programs in place, and employees eager to continue working for that franchise simply makes purchasing a franchise that much more appealing.

Get in Touch with a Professional

It should be noted that although purchasing an existing franchise may require more money upfront, you have a much higher return on investment in the initial year.

The reason that you may end up spending more upfront is that existing franchises have brick-and-mortar premises and other assets. You might also be expected to sign a franchise agreement.

A franchise agreement places some restrictions on the locations that you can operate from as well as approved business practices and certified vendors.

Because purchasing a franchise involves multiple properties, ongoing advertising and business networks as well as signing a franchise agreement, discussing your options with a professional is the best step to take if you’re considering purchasing a franchise, contact us today.

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