There are a lot of different places to look when you are considering purchasing a franchising. Always look for a franchise that is properly capitalized and well managed; examine the track record and do the necessary research. Usually, reputable franchisees will be willing to meet face to face to go over the details of the business and to explain what they do, when they do it, and how they do it. Taking the investigative process to this point can involve extra fees, but if you have the money it might be well worth the extra investment.
If you know what franchise you are interested in, a good first step is to start with the franchiser. They can meet with you to give you detailed purchasing information. Another alternative is to contact existing franchisees to see if they are looking to sell their franchise. This is a money saving option because you will not be required to pay the franchiser a fee when taking over an existing franchise. However, if the seller is asking a high price for the franchise they are selling, you may end up paying the equivalent of the franchise fee to the seller. To make sure that you aren’t paying too high a premium, compare the asking price to the cost of a franchise fee for a new franchise. Along this same vein, franchisers are often able to provide interested buyers with contact information for existing franchisees looking to see their franchisees. Also, some franchisers will buy back and temporarily operate the franchises until an appropriate franchisee can be found.
Other Places to Look
Annual franchising trade shows are a popular way to generate interest in franchises. Interested buyers can have the opportunity to speak with as many franchisers as possible, all in one convenient location. These trade shows also often have educational seminars with information on what to expect when franchising, and the advantages and disadvantages of these types of business arrangements.
Business brokers match business buyers with business sellers. Brokers usually charge a fee, but they do have their advantages. A good broker will screen franchise opportunities for you, effectively doing the research and a lot of the leg work for you, to determine if there are major problems. If you have the available capital to spend on the broker’s fee, and lack the time to do a thorough research process yourself, this is a viable option.
There are also many Internet websites that list franchises for sale. A general search will generate a lot of hits. The Internet offers the convenience of doing the necessary research from the comfort of your home; you can do a general search of sites that offer a variety of franchises for sale, or you can do a specific search if you have an idea of the particular franchise operation that you are interested in. Approach this method cautiously, as this is a buy beware method of searching for franchises and businesses for sale.
Most newspapers have a classifieds section that has a section that lists businesses and franchises that are for sale. Look to larger publications or publications from larger metropolitan areas if you have difficulty finding information in your local newspaper.
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