Wednesday 30 May 2012

Why buy a franchise?


Buying an existing franchise can be a great way to start a business
Buying an existing franchise can be a great way to fast-track your way to running your own business. However, there are also pitfalls that must be avoided when you buy a franchise.

There are two routes into franchising.

Either you buy a franchise directly from the franchisor or you look at an existing franchise for sale.

An existing franchise for sale is 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 buy a franchise, you will be looking at a business that has already been tested out. This can be a good thing as you will know the business has already proven to be a success.However, it is important to find out why the franchisee wants to sell that particular 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 probably not buy a franchise such as this! Are you certain that you will be able to make the business profitable if they cannot? You need to find out the reasons for the business’ lack of success. 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.

Posted by Winston Wambua, Senior Business Consultant

 For more information about Company Formation or inquiry you can contact me on

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1 comment:

  1. Buying franchise is one of the right way to start own business to grow rapidly globally. Now a days every businesses used this franchise technique to getting faster popularity in the world.

    own a franchise

    ReplyDelete

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