Potential franchise buyers,
I was reading some threads on a franchise forum site and found questions about buying exisiting franchises vs. opening up a brand new location. One question was whether or not there would be training and support if they bought an exisiting franchise.
I can tell you that where I work, there is just as much training and support for someone buying an existing as a new. If the franchise you are looking at buying doesn't provide the training or support, I suggest you buy something else. Just because it is an existing franchise doesn't mean it is following the business model, has all the equipment you need, doesn't have everything in perfect working order to the point you don't need to know how to fix it, etc. You don't know how any existing employees were trained and what they have been up to.
I have dealt with many transfers and many new franchises and while buying an exisiting franchise can be easier, it can also be harder. If you buy a business that has been around for 5 years, maybe they did things the right way the first couple of years, but now that you are buying it they have developed many bad habits. Maybe their equipment is in bad shape and after you buy the business someone like me will show up and tell you that it needs to be replaced.
What kind of reputation has this business built up? What do past customers tell their friends about this business? Are you buying a good or bad reputation?
Opening a franchise from scratch can be hard, but you learn as you go. Everyday you have to learn a few new things and before you know it, you have a thriving business. The new owner stepping in now needs to know everything at once. They don't have time to learn on the go like the owner that has 10 customers, then 50, then 100, then 200. You are buying 500+ customers and are responsible for employees that know much more about the business than you do.
If you buy an existing franchise, you better have just as much training and support as the franchise owners. Believe me, you will need the encouragement, advise, wisdom, experience as much as anyone.
Fran
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2 comments:
Great article. I've been looking into buying an existing business, so this advice will help. My own trouble is that I don't really know where to look for one that's for sale. Would you, or another reader, have any suggestions? Thanks!
Genevieve, I suggest checking out your local Chamber of Commerce. They should be able to help you. It's also just a good way to network. I also suggest looking at www.BizTrader.com. It's a global marketplace for small business. You can buy, sell, or invest in one. There's a wide selection of businesses. Definitely check it out sometime if you want to buy a business and good luck.
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