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Buying a Franchise – The Right Decision?
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| Guest post by: Mike Derrick |
Article Overview: There are thousands of franchise opportunties but buyera must be very selective and perform a high level of due diligence to increase the liklihood of success. This article addresses the advantages of owning a franchise as well as the potential pitfalls of franchise ownership.
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Free Download - Sale of a Business By Mike Derrick |
Buying a Franchise – The Right Decision?
The many individuals that have been displaced from the comforts of secure positions within corporate America are on the rise as witnessed by the unemployment rate. And, as most readers are keenly aware, the unemployment rate is actually much higher since the number of permanently unemployed individuals is no longer statistically relevant thus increasing the real rate of unemployment. The many displaced members of society not wishing to remain on the sidelines have few choices; seek employment elsewhere, start a business, buy an existing business, or purchase a franchise.
The latter option, purchasing a franchise, may well offer the best solution for financial security. The ability to utilize 401(k) funds without IRS penalties provides an even greater motive to consider a franchise. While not all franchises meet the standards for the potential franchisee there are a number of franchise characteristics that can be readily identified. Among the features that a solid franchise opportunity should bestow upon the owner will include:
- Brand recognition
- Training
- Proven systems
- Extensive support
- Advertising
- Reputation of the franchise
- Franchisors are guarded with respect to the information, financial and otherwise, that will be provided to the potential buyer of a franchise
- The buyer of a franchise will not have unlimited territorial protection
- The franchise agreement is rarely negotiable thus subjecting the franchise buyer to rigid terms
- The possibility of unilateral termination of the franchise agreement by the franchisor if certain actions by the franchise owner do not comply with the franchise agreement
- Significant fees (royalty / advertising / marketing) may apply
- Is established and the demand for its product(s) / services is widely recognized
- Can qualify for financing, if necessary
- Matches or is suitable for the franchise buyer\'s level of expertise, abilities and business experience
- Fulfills the franchise buyer\'s other objectives (i.e, income, hours willing or able to work, etc.)
Article Tags: business broker, business broker dallas, buying a business, buying a franchise, dallas business broker, franchise, franchise ownership, texas business broker
Referred by: http://www.hbgadvisors.com
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About the Author: Mike Derrick RSS for Mike's articles - Visit Mike's website As a solid advocate and proponent for small to mid-size business owners that desire to formulate an exit strategy I, along with the other members of Huntington Business Group, have been very successful assisting clients achieve their objectives. Our unique approach that instills trust and confidence with our clients is primarily attributable to the VentureXchange system that Huntington Business Group introduced in 2010. VentureXchange is a proprietary system that reshapes the typical focus of the business brokerage industry. The specific focus is upon the business owner. The early phases of this system allow us to quickly get a grasp of the business owner's ultimate objectives (i.e. the sale of the business may only be an intermediate step to his/her real objective). We also focus upon a number of other factors to ensure a successful transaction. Savvy buyers look beyond the financial results in order to be certain that risks can be minimized. VentureXchange was designed to anticipate risks and to alleviate these risks. Our system quickly positions the seller and his business for an optimal solution. With more than 20 years of M&A experience in the corporate environment my ability to assist both buyers and sellers in their efforts to fulfill their dreams has been very both successful and rewarding. I specialize in a number of industries, but my experience and that of Scot Cockroft, the owner of Huntington Business Group, allows us to provide the level of professional expertise sought by any business owner. As a graduate of University of Texas at Austin and a long time resident of the state I direct most of my M&A activity within Texas, but many businesses in the bordering states have enjoyed our business acumen for several years. Our success, as we extend our reach beyond Texas, is the result of the national recognition we have received as evidenced by the #1 ranking Huntington Business Group was awarded for being the most successful business brokerage firm in the VR Network for 2010. At the same time the Dallas Business Journal recognized Huntington Business Group as 2010's Dealmaker of the Year. These accolades are, of course, very rewarding to our firm, but more importantly, they reflect our commitment to the client. Click here to visit Mike's website Selling a Business Where Does One Begin Sale of a Business Stock Market Volatility and the Impact on SmallMedium Size Business Owners and Buyers An EarnOut May Seal the Deal Buying a Franchise The Right Decision |
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