Franchise Resales - Pros and Cons
Franchise Resales - Pros and Cons
If you believe you might be part of the latter group, here is some franchise information to look at before you get your heart set on this path:
1. Discovering an existing franchise that is part of a established franchise system, fulfills your needs, matches your skills, at a price you can afford, in an area where you want to live can take time. Going concerns that meet these criteria don’t come along often.
2. You usually need to pay more for a successful existing franchise than you would pay to build the franchise yourself.
3. Whereas franchisors may give you an approximation of what it costs to start a franchise in Item 7 of the Franchise Disclosure Document, you often must rely on your own resources to determine the value of an existing franchise. You need to know how to value the business, or you need good advisors who are familiar with the business category or even with that franchise system.
4. Taking over an existing business can be a little like climbing on a moving train. The train is already going down the tracks. Your task is to figure out how to drive the train before it derails.
If you discover a suitable franchise, there can be many nice advantages.
1. A flourishing existing business should already own a proven customer base you can rely on once you take over.
2. A successful existing business should also hold a well-chosen group of employees that know how to conduct the day-to-day operations of the business.
3. You should be able to assume the existing lease thereby eliminating the need to search space and wait for the build-out to be accomplished.
4. You may step right into a positive cash flow situation.
Over the years I have worked with numerous people. Most possess an opinion in reference to whether it is best to pay a premium for a successful existing business or start a business from scratch. I can tell you that both approaches have their pluses and minuses. Remember that there are no free rides. If the business is successful, stable and profitable, it is going to cost more to buy and you will have a smaller upside. In other words, you are buying cash flow at the expense of growth potential.
On the other hand, if you start your own franchised business it might cost less with an smoother learning curve but the ramp up to cash flow break even will take longer.
Which constitutes the right answer? Well that is for you to answer. It you need advice, feel free to contact us at The Educated Franchise.
Franchise Resales Pros and Cons - To learn more about this author, visit Rick Bisio's Website.
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A few franchise candidates wish to gain their mark by starting a franchise business from scratch. Others prefer to skip the start up and purchase an up-and-running franchise business.
If you believe you might be part of the latter group, here is some franchise information to look at before you get your heart set on this path:
1. Discovering an existing franchise that is part of a established franchise system, fulfills your needs, matches your skills, at a price you can afford, in an area where you want to live can take time. Going concerns that meet these criteria don’t come along often.
2. You usually need to pay more for a successful existing franchise than you would pay to build the franchise yourself.
3. Whereas franchisors may give you an approximation of what it costs to start a franchise in Item 7 of the Franchise Disclosure Document, you often must rely on your own resources to determine the value of an existing franchise. You need to know how to value the business, or you need good advisors who are familiar with the business category or even with that franchise system.
4. Taking over an existing business can be a little like climbing on a moving train. The train is already going down the tracks. Your task is to figure out how to drive the train before it derails.
If you discover a suitable franchise, there can be many nice advantages.
1. A flourishing existing business should already own a proven customer base you can rely on once you take over.
2. A successful existing business should also hold a well-chosen group of employees that know how to conduct the day-to-day operations of the business.
3. You should be able to assume the existing lease thereby eliminating the need to search space and wait for the build-out to be accomplished.
4. You may step right into a positive cash flow situation.
Over the years I have worked with numerous people. Most possess an opinion in reference to whether it is best to pay a premium for a successful existing business or start a business from scratch. I can tell you that both approaches have their pluses and minuses. Remember that there are no free rides. If the business is successful, stable and profitable, it is going to cost more to buy and you will have a smaller upside. In other words, you are buying cash flow at the expense of growth potential.
On the other hand, if you start your own franchised business it might cost less with an smoother learning curve but the ramp up to cash flow break even will take longer.
Which constitutes the right answer? Well that is for you to answer. It you need advice, feel free to contact us at The Educated Franchise.
Franchise Resales Pros and Cons - To learn more about this author, visit Rick Bisio's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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