Advantages of Buying a Franchise

With all the uncertainty in the current market, it can be a daunting task to start a small business. Starting your own small business from scratch carries many risks, and may not be feasible for the majority of first time entrepreneurs. Buying a franchise can eliminate numerous risks, reduce start up and ongoing costs, and still prove to be a great business opportunity.

Franchises have a proven record of success, and have created effective business models that can be easily applied by numerous people in a variety of locations. You are able to view the past success of the franchise company, and also contact current franchisees in order to make an informed decision regarding the purchase of a franchise. A franchise should already have strong brand recognition, which is particularly valuable when attracting customers.

Once you purchase a franchise, extensive training programs and ongoing support are almost always offered. Franchise company staff can help you deal with issues that occur while running the business, meaning that you are never alone. This is a huge bonus for those that are new to owning a small business, and can avoid stressful situations and costly mistakes. You should also be provided with marketing assistance, from budgeting to customer retention. Remember, the franchisor wants you to succeed and therefore will aid you as much as possible, as a poor result would reflect badly on the company as whole and potentially jeopardize their other franchises.

The franchise company will also often provide assistance when it comes to buying land for the new franchise, and during the construction process. They can regularly help negotiate superior deals on the sale of land, the selection of contractors and the obtainment of necessary equipment and supplies. The purchasing power of the franchise company as a whole can be extremely beneficial for you as an individual, and can also enable you to secure good deals for ongoing purchases.

A huge advantage of buying a franchise is the minimization of risk. A good franchise has a proven track record, provides ongoing assistance and allows you to compose more certain future projections for the business. Of course, you must still research and clearly assess the risks and rewards of buying a franchise, but for many it is a viable and practical option. It can also provide an ideal stepping stone to starting your own independent small business.

Tips for Selling a Resale Franchise

At some point and time, all franchise owners will go through the process of selling their franchise. This can be a frustrating process, if you are unprepared and uninformed. Fortunately, the stress of this task can be greatly reduced by following a few simple guidelines.

Know the franchisor’s rules regarding resale

It’s important to keep your franchisor informed about your plans to sell the franchise from the beginning. Many franchisors have rules pertaining to the sale of a franchise, and criteria that the buyer must meet. Most franchisors will offer assistance in selling your franchise, and may also be aware of potential buyers interested in a specific territory.

Prepare for the sale

Be aware that some franchise sales require more detailed preparation than others. Ask your franchisor for specific advice about what you may need to do for the sale of your franchise. This may involve putting financial records in order, establishing the value of the franchise, setting a price, and notifying employees if necessary.

Understand the market, and the potential buyer

Having a basic understanding of the market before listing your franchise for sale is imperative. Use similar franchises that have sold recently for a baseline to determine what your franchise is worth.  Establish if the local economy is suitable for a quick sale, and verify if there are potential buyers in the area. Check with your franchisor about any specific qualifications that a buyer must meet (total capital investment, liquid capital requirement). To save time, know the type of buyer that you are looking for so that those with insufficient qualifications can be disregarded.

Market the franchise

There are many options for advertising your franchise for sale. Organize exposure for your franchise in the form of networking with people in the industry, and online and print advertising.  You may also choose to involve a business broker in the sale of your franchise. When it comes to a sales pitch, ensure you know the demographics of your market, answers to potential questions, and all about the franchise system for sale.

Provide assistance to the buyer

Ultimately, you might need to provide assistance to the buyer of your franchise. Help them complete their application with the franchisor. Include training or even working alongside the buyer for the first few months.

Franchises Ideal for First Timers

Indeed, the franchise may provide the perfect opportunity for the first time business owner.  A franchise is all about running a business according to an established formula that has proven successful.  Many forms of support are provided to the franchise owner by the parent company, including training and a recognizable name in the marketplace – like Kinko’s or MacDonald’s – to name a few.

The Franchise Opportunity runs the gamut from being service or product oriented and from being an office, retail outlet, or home based, allowing the buyer of a franchise to find his or her niche in the business world.  The owner is often expected to find a location and to buy or lease the equipment required to operate the franchise.  Although there is less risk involved in buying a franchise, hard work is required to result in success.

The drawback of a franchise would be for the entrepreneur looking for freedom, creativity, and the ability to make a name for him or herself.  The business owner who would like to establish his or her unique identity in the business world is unlikely to be happy as the owner of a franchise