In the world of franchising, there are essentially two main routes you can take toward opening up shop. First, you can choose your brand, obtain rights to a location, and open up a completely new branch. From scratch, you’re starting a business from the ground-up.
Or secondly, you can purchase a business that’s already in place. By searching for companies that are up for sale, you can easily take over ownership of an already established location. The latter of which, however, is often overlooked or forgotten as a profitable option. For some reason, folks believe they should be starting fresh, and they ignore what’s already had its groundwork put into place.
However, it might be a better or less strenuous option, depending on your personal goals. Here’s why:
1. Existing Franchises Already Have a Customer Base
They have regular customers, they draw a crowd, people know they’re around, and what they have to offer. While you will still advertise, you’re marketing something that folks already know and love … not something brand new that you’ll have to gimmick others into trying.
2. The Employees Are Trained
If you’ve ever been to a new opening (of any kind), you know understand how unorganized tasks can become, and how quickly. But when starting out with a brand that’s already gone through their awkward phase, you’re skipping those hiccups altogether and joining while it’s fast and efficient.
3. They’re Turning a Profit
From day one, you have cash flowing in. No gap in income or waiting for an open date before you can see movements in accounts – that legwork has already been done, and you’re making dough on your very first day as an owner.
4. The Initial Logistics Have Been Done
If you hate the idea of running around and completing tedious tasks, an existing franchise is most definitely the choice for you. While some live for these logistics (and even set up franchises and sell them, just to keep doing the parts they love), others would rather skip them altogether. Find your strengths and weaknesses by looking into various options.
5. When It’s a Good Deal
For whatever reason, business owners are selling at various points in prices and time. They might be having personal struggles, or are looking to get out of the business for any number of reasons. (Remember that a low selling point isn’t always a red flag – that owner could have made great money for years; ask for profit margins to be sure.)
If the timing is right and the asking price seems fair, you may have stumbled across a great deal.
6. You Love a Brand or Location
Maybe it’s always been your dream to franchise with brand X, if given the chance. But up until a point, they’ve been spoken for in your demographic location of choice. Or perhaps there’s a unique corner spot that you’d love to own; a historic building that draws in a unique customer base. Whatever it is that makes your potential building or brand special to you, it’s reason to consider buying, especially when the opportunity to buy comes along.
7. You’re Ready to Give it New Life
Seeing a struggling franchise can be a tough sight to see, especially when you know you could do better. Instead of shaking your head at their failed attempts, consider putting your ideas to work, and pulling that franchise out of the slump they have come into. With new ownership, brands can shed their dead weight and take on new, better habits that will allow them to soar.
There are several reasons that prove existing franchises might be the ideal business fit. Check out the above to determine your best business venture, and how you can make it a reality.
