13 Sep Best of Both Worlds – A successful up and running franchise has all the advantages
Why Aquire an Existing Franchise?
One of the best ways to become your own boss successfully, is to acquire an existing franchise. Why is acquiring an existing franchise so great?
Well, a franchise already has many things going for it such as great systems, marketing support and brand recognition. It also has all the great properties of an existing business such as existing customers, established market share, and current cash flow. Owners of existing franchises tend to have a high success rate because of the immediate acquisition of cash flow and customers as well as training and ongoing support from the franchisor.
If you are embarking on your first business ownership venture or if you are entering an industry that is new to you, look at an existing franchise to acquire.
Do You Have the Right Stuff?
Check out the Federal Trade Commission’s guide to buying franchises site. It can help you determine whether you are made of the “right stuff” to be a franchisee. Not everyone is cut out to be a franchise owner. Do you like to create your own way ahead, develop your own product lines/menus and not want to be locked into someone else’s way of doing business? If any of these statements are true, then becoming a franchisee may not be your best bet. However, if you like to have established and working processes and procedures in place, then owning an existing franchise just might be right for you!
You will still need to do your own due diligence. Not all existing franchises are as they appear to be on the surface.
A franchise business is not successful just because it is a franchise, or just because you personally know the place or just because the brand is well known. Plenty of franchise owners have come to us over the past decade frustrated because their company still was not making money – even after several years of hard work.
Remember how popular brands like Curves and Quiznos once were?
Be diligent and take time to check out both the specific location you are looking to acquire and the franchise company itself. Visit websites like BlueMauMau.com and Franchise.org to give you a better perspective about the franchisor.
Ask questions of the current owner, other franchisees and the corporate office. You need to request a Seller Disclosure Document. Look at tax returns that were actually filed with the IRS, do not just a review a copy the business owner has on hand. Take your time to understand all those important details that make the franchise tick!
Get Professional Support in the Buying Process
If you are thinking about acquiring an existing franchise but want support on understanding the business, seek out business acquisition support programs like Legacy Venture Group’s Legacy Guardian Advantage, which looks at market value, funding, contingencies, and more. And remember to reach out to a good business attorney and business accountant for all your financial needs.