Buying an existing franchise :
what you need to know
Are you thinking to buy an existing franchise?
A highly attractive alternative to create a franchised business, buying an existing franchise requires careful consideration of the advantages and disadvantages involved.
Benefits
of buying an existing franchise ?
When you buy an existing franchise, you also take over its goodwill, i.e. its premises, staff, stock and customer reputation. The store’s previous activity gives you an early indication of the potential of the area in which you will be setting up, as well as last year’s sales…
Valuable data to guarantee the success of your business. With your staff already trained and your clientele already loyal, you’ll also save time and be up and running as soon as you launch your business as a franchisee.
Things to consider
before buying an existing franchise
Although buying an existing franchise can be an attractive option for any prospective franchisee, caution is still the order of the day. It’s vital to assess the financial health of the business you want to take over. To ensure that the takeover goes as smoothly as possible, you’ll need to take a close look at the annual accounts, the margins achieved, the customer portfolio… as well as the franchisee’s motivations for selling his business. Whether the sale is motivated by a declining market, competition in the sector or a difficult relationship with the franchisor, it’s important to have all the facts in mind before finalizing your takeover project.
Buying an existing franchise,
what costs ?
All the above advantages explain why the cost of a takeover is higher than that of a new franchise: the business is already established, the staff trained and the outlet fitted out. The higher cost is also due to the prime location of the franchise you are taking over. Guaranteed by the franchisor when the business is set up, it adds value to the outlet, as do installation costs.
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