Franchise ownership is an appealing idea to many because it offers the opportunity to become your own boss while investing in a venture with an established business model. However, the start-up processes for some franchise opportunities can seem daunting. For this reason, buying an existing franchise location can be a great way to get into the world of franchising without having to start from scratch.
When you purchase an established franchise, you can benefit from the hard work and success of a previous owner. However, finding the right franchise for sale is not always easy. In this article, we explain the benefits of buying an existing franchise business, how to find an existing franchise for sale, and how to evaluate potential opportunities.
Benefits of Buying an Existing Franchise Business
There are many benefits to buying an existing franchise business. For starters, it may be easier to benefit from the existing reputation of the brand and its success in the marketplace if the franchise business has been operating in that location for a while. Other key benefits of buying an existing franchise business include:
Existing Customer Base
Buying a business with an established presence in a location typically brings with it their existing customers, as well. These customers know and trust the brand, so you can leverage that existing relationship for your franchise success. This can make it easier to generate more revenue more quickly when first getting started.
Easier Startup Process
Another key benefit of buying an existing franchise business is an easier startup process. Building a new franchise business in a new market is a lot of work, and getting established takes time. But when you buy an existing franchise business, aspects of this startup process may get easier and faster.
For example, it may be easier to get the necessary funding to start your business if it’s already an established franchise location. Banks and lenders tend to be more willing to finance established businesses than those starting from scratch. There may even be advantages to buying adjacent territory as well.
Another way that the startup process may be easier is that several steps, such as staffing, creating a business plan, and knowing your operating expenses, have already been completed for you. You may even be able to inherit trained employees, reducing the amount of time and investment in hiring and training personnel.
Finally, buying an existing franchise business means that you may be starting out with a positive cash flow from day one, which isn't usually the case for new businesses. It's easy to see how starting with a positive cash flow can give your new business a significant competitive advantage!
How to Find a Franchise Resale Opportunity
With so many benefits, buying an existing franchise business could be the perfect way to get started as a franchise owner. But how do you find the right franchise for sale?
The best place to start when looking for a franchise resale opportunity is to use franchise resale directories and to speak with franchise organization’s development directly.
Utilize Franchise Resale Directories
Franchise resale directories are great resources to use when searching for an existing business. These directories list hundreds of existing franchise businesses that are currently available for sale. Using franchise directories is a convenient way to narrow down your search and find an opportunity in the industry and location you want.
Some of the top franchise resale directories include:
- BizBuySell offers one of the largest online marketplaces for business resales, including franchises.
- Business Broker.net is a marketplace designed to help our users buy or sell a business.
- Franchise Growth Network is a franchise directory that allows you to search for franchises by location, industry, and more.
Speak with a Franchise Organization
Once you've identified a few potential franchise resale opportunities, the next step is to speak with the franchise system directly. This can be a great way to learn about franchise resale opportunities available to you. Franchise organization representatives can provide additional information about operations, help you understand the local market, and guide you to the right opportunity for you.
Neighborly® franchise brands, for example, have a dedicated team to help prospective franchise owners evaluate current resale opportunities. As one of the fastest-growing franchise companies, Neighborly may be your best first step toward business ownership in your preferred location!
What to Consider Before Buying an Established Franchise
Before buying any franchise business (or any business, period), it's important to weigh the pros and cons of each opportunity. To make the best possible decision, you should first do your research on any franchise opportunity you are considering. Gather as much information as you can about the local market, current and future business expenses, and ROI forecasts.
In addition, be sure to ask lots of questions, both of yourself and of the franchise owner and organization. Key questions you should ask before buying an established franchise include:
- Why is the franchisee selling?
- Is this industry of interest to you?
- Do you have the necessary experience to run this franchise?
- What are the local market conditions like?
- Are there any legal issues or restrictions within the franchise system?
- What kind of support do you get from the franchisor?
- What kind of training and support is available to new franchise owners?
When evaluating a franchise opportunity, it's also important to consider your personal goals, preferences, and financial limitations. Buying an existing franchise is an exciting opportunity that can provide a great foundation for success, but it's important to ensure that you have all the right information before making an investment.
Existing Franchises With Neighborly
At Neighborly, we offer extensive access to the ongoing training and support you need to find success and serve your community. We have a team dedicated to resales business, and our team of experts is readily available to answer questions, provide guidance, and help you make the best decisions for your business ownership journey. This offers prospective owners a great way to plan for the long-term lifecycle of the business, as exit strategies or succession planning are just as important as acquisition of a business. With over 5,000 franchises globally, we offer a variety of home services franchise investment opportunities designed to fit your goals and interests.
Ready to learn more? Take a look at our Franchise Map to find resale and new franchise opportunities near you, or contact us to talk with one our expert franchise developers today!
