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A franchise is a great way to exercise that entrepreneurial spirit or eventually become a small business owner but the real question remains: should you buy an existing franchise or a new franchise? 1. Track Record – Some existing franchises can be turnkey businesses with a long history of profitability and cash flow. A new franchise, however, offers a brand new opportunity unaffected by the previous owner. You may have to work harder to build the business but you won’t have to worry about old impressions negatively impacting your business going forward.While there is a general sense among franchise buyers that purchasing an existing franchise is easier than launching a new franchise outlet, there are several advantages of each that are worth considering: 2. Purchase Price – New franchises are often less expensive because they don’t have a customer base, track record or reputation that is often very valuable. Additionally, new franchise locations often have a set fee structure but buying an existing franchise may allow for more ability to negotiate directly with the seller. 3. Customer Base – An established and loyal customer base is a huge benefit for a new franchisee. Despite any ownership changes that may have occurred behind the scenes, an existing franchise gives customers a sense of consistency and familiarity. 4. Equipment and Facilities – If you buy a new franchise, it’s likely that your equipment and facilities will also be new or at least newer than they would be if you bought an existing franchise. Outdated equipment can be very important in certain sectors, such as the food industry, and are tightly regulated to make sure they are reliable and up to industry standards. Ultimately, the decision to buy a new or existing franchise is a personal decision based on your personality, preferences and risk threshold. In general, existing franchises are a safer investment, but there’s no greater satisfaction then growing a business from the ground up.For more info, click here
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