Franchise for Sale – Consider These Issues When Buying a Franchise
Buying an existing franchise (a franchise for sale) is similar to buying an existing small business. It can be a faster and safer way to owning your own business, providing everything is in order. When you buy an existing franchise you may pay a premium, but the advantages typically offset the extra cost. For one, this franchise business is already open and doing business. Typically, they already have a customer base. Other advantages are, but not limited to, established track records, cash flow, and goodwill. Financing may also be easier to secure for an existing franchise with positive cash flow, than for a new, unproven franchise.
When you buy an existing franchise you can find out a lot about the business before you buy. Here are some of the questions you should ask, and some of the research you should conduct before buying an existing franchise (a franchise for sale):
Find out how many franchises the franchisor has nationwide. This will help to determine if the franchise is well-established. It's important to look for franchises with 50 or more units. This is especially important, if you'll be finance the purchase. Banks and other lending institutes want to make sure the franchise you'll be purchasing has a track record. Franchises with under fifty units can be difficult to get small business financing for.
It's also important to know the level of support you'll get after you buy the franchise. Paying a franchise fee is required for these services, so make sure that is noted in the contract. You may also want to ask about marketing and advertising. Be sure there's ongoing training, not just at the initial sale.
Some franchisors have been known to oversell their franchises, and squeeze the territory. Make sure that doesn't happen to the franchise that is for sale. Find the number of franchises that can be bought or sold in a geographic area. This ensures you don't have competition from new franchise owners shortly after you purchase the franchise. You may have to call existing franchise owners who operate in larger cities. Ask them how to handle this, if it presents a problem.
Make sure you review the financials of the franchise you are considering. If need be, hire a CPA to take a look at the books. Make sure you get their adjusted net income, the total amount of cash produced by the business. That income includes the profits, the owner's salary and all of the many cash-related benefits of owning the business.
Search for an existing franchise for sale with these considerations in mind. When you find one, be sure you are prequalified with a lending institute, so you’ll be ready to buy when you spot that ideal franchise. I know there are plenty of franchises for sale, but you want to make sure you're ready when the time comes.
The Ultimate Team knows all about franchise businesses, search engine optimization, and the importance of customers. The Ultimate Team's system is for sale, and ready for you to take action. You can come to the Ultimate Team site to see if our alternative to a franchise business is right for you, or fill out the form below and someone from the Ultimate Team will contact you.
Jeffrey Sloe, Internet Marketing Advisor to The Ultimate Team
440-725-3729
jeff@internetmarketingadvisors.net
http://ultimate.org
