When buying a franchise, you have the option of either buying a new one or an existing one. The latter is known as a franchise resale.
Much like buying an existing business instead of starting your own, buying a franchise resale can have many advantages over setting up a new franchise from scratch. Below are just five compelling reasons to consider a franchise resale.
When you set up a new franchise, you have to work on attracting initial customers. With a franchise resale, you’re buying a franchise that already has a steady flow of clients and an existing turnover. This means that you’re certain to have cash coming in straight away. It also means that you don’t have to do as much marketing initially. This can make it a much secure investment.
Unlike a new franchise, which requires you to build a team from the ground up, a franchise resale comes with an existing team of employees. Some of these employees may have been working there for a long time and could have lots of experience in their role. All in all, you won’t have to dedicate as much time and energy to recruiting, training and nurturing employees.
Structure already in place
Franchise resales already have a working structure in place. All the necessary equipment and software is set up and in operation. There are also likely to be routines and precautionary measures in places to deal with familiar problems – while a brand new franchise often has to overcome teething troubles, an existing franchise will have found ways to deal with any difficulties that occur in the beginning. Using previous years’ sales figures, you may also be able to better prepare for busy periods and dry seasons. Consequently, a franchise resale can be a smoother ride.
Unlike buying an existing independent business, an existing franchise comes with a level of support that can make it less risky. There may be existing relationships with certain suppliers through the franchisor – there will likely be products and equipment recommended for you. In many cases, franchisees are also able to reach out to franchisors for advice.
Easier access to funding
While a franchise resale can often be more expensive to buy than a brand new franchise, you could find that it’s easier to seek out funding from lenders. Buying a franchise resale is viewed by lenders as less risky than buying a new franchise and a lot less risky than starting/buying an independent business. All in all, it’s much easier to invest in a franchise resale than a new franchise or an independent business.