What is a franchise resale?

Anyone exploring purchasing an existing business should consider looking into a franchise resale. This is a smart choice! Purchasing an existing business means you do not have to work through the start-up period of any business—which can be rough. You are getting an operation with trained staff and customers already coming through the door. Or are you?

Purchasing a private, local business may seem prudent, but the business might have only been successful because of the sheer force of will from the owner. They may not have systems or processes in place, the owner may have been doing much of the work, and the customers might not be happy.

With a franchise resale, you get an existing location, plus the added benefit of the franchisor’s experience. They will provide you with the systems and processes for everything from hiring and training to ordering products and customer service. You get the best of all the possible options: cash flow and help.

When you buy a franchise resale, you purchase a franchise location from an outgoing franchisee. There are many reasons a franchisee may be looking to sell. They may be retiring or moving to a new locale. They could also be struggling with their own ability to lead and manage a location, in which case, you may need to turn around the franchise to help it reach its full potential.

A resale is slightly different from a normal business purchase. Unlike most privately-owned businesses, you can’t just sign papers and assume ownership. With a franchise resale, you need to work within the constructs of the franchisor. The seller will have been granted a territory from the franchisor to work within, so in addition to buying that location, you are purchasing the rights to that territory.

As a new franchisee, you must follow all the steps any franchise candidate would. You will need to be interviewed and assessed by the franchisor and have a discovery day at their corporate offices.

Remember, just because a franchise is for sale does not mean it wasn’t successful. Many franchise units have been resold for various reasons over the years. In many cases, a unit that has been sold many times shows how successful it is. The previous owners sell to see the profits from their investments.

Are there advantages to purchasing a franchise resale?

Franchising itself is a great opportunity. Most people don’t realize they are using franchises when they do, with the obvious exceptions of fast food and some service locations. You often use a Franchise for sale Melbourne when you get your house painted or your lawn mower.

Even beyond the basic advantages of owning a franchise, like a franchisor’s support, proven processes and systems, corporate marketing, and name recognition, a franchise resale has additional advantages that a franchisee starting a unit won’t have.

Your unit is already open. There is no time to build the location or customer base. Having an existing location means your doors are open immediately to provide a return on your investment. Building a territory is a time-consuming process, and franchisees purchasing a resale have the opportunity to skip this step.

The brand is already known in the area. To get customers when building a Business for sale Melbourne, owners will often dump money into marketing and pound the pavement to get the word out; this is not needed for a resale.

There is already a cash flow. Return customers will continue to purchase products and services, and you will reap the benefits of extant revenue structures.

You won’t have to hire and train staff to open. The shelves will be stocked. The previous owner will already take care of all the development and asset requirements to run the business.

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