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Should you consider buying an existing franchise?

Whilst you can buy from the franchisor, there is also the option of buying an existing franchise.

Although you could buy a franchise directly from the franchisor, there is also the option of hunting down an existing franchise for sale. These are often advertised online or sometimes the franchisor might point you in the direction of a franchisee who wants to sell.

If you do decide to look at an existing franchises for sale, you will be looking at a business that has already been tested out. It is important to find out why the franchisee wants to sell that particular British franchise.

For sale signs are put up for perfectly good reasons such as retirement, personal reasons or a desire to move into a different area of business. However, some franchisees might want to sell because the business has not been financially viable. You should be careful about buying such businesses.

Are you certain that you will be able to make the business profitable if they cannot?

An existing franchise on sale could be a recognition that the business is simply not up to scratch. If, for instance, it is in a poor location or the market that it is catering for is not large enough, then you should probably not enter into the deal.

Also, you must make sure that you are getting a good value for money. Compare the costs of the franchise to other businesses of a similar nature.

Also, make find out how much an original franchise from the same company would be sold for now.

The devil, as they say, is in the detail and you must make sure that you get all the relevant facts prior to purchase.

Or, you will find yourself in the same situation as that franchisee, desperately trying to re-sell that franchise.


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