Should I buy a franchise? Maybe, but weigh all the options and then, if you decide a franchise is right for you, talk to a business broker about buying an existing franchise business instead of starting a new location. Why? You may be able to buy a successful operation for half the cost of starting in a new location.
I’m familiar with one franchise in which the startup cost is $330,000. I have a franchise under contract for $185,000. And it’s very successful with a great track record and the potential to continue growing revenue and profits.
Consider that in starting a new location you have no customers. No customers means no revenue stream. How long will it take you to break even or become profitable and at what level?
When the day comes that you want to sell your business you chance of recovering the full start up cost is slim.
With an operating franchise you know what the revenue stream is. During due diligence you can answer all your questions and learn everything you need to know in order to determine if the business is right for you.
Some of the advantages of a franchise are: Brand name, marketing support, corporate support, buying power and a lower failure rate.
Some of the disadvantages of a franchise are: it’s their way or the highway, royalties on every dollar and if there is a big black eye you’ll feel the pain…think Denny’s.
If you would like assistance in purchasing a successful business please contact me.
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