3 Questions to Ask Before Buying a Resale Franchise Business

Buying an established franchise business can be a rock-solid investment. That’s especially true if you can find a well-run business under a great franchise brand.

However, buying a resale franchise isn’t for everyone. Some entrepreneurs prefer independent businesses. Some would rather start their own franchise instead of purchasing a resale. And if you purchase a poorly run franchise or choose a mismanaged brand, you’re in for serious disappointment.

So before you buy a resale franchise, ask yourself three questions:

    • #1: What makes owning a franchise a better option than independent business ownership?
    • #2: If I want to own a franchise, why buy a resale franchise instead of a new one?
    • #3: How can I find the right resale franchise for my goals and resources?

Franchise Business vs. Independent Business

There’s a long-running debate about whether it’s better to own a franchise business or an independent company. At the end of the day, it’s a matter of personal preference. Some people prefer a proven blueprint and recognized brand. Others want the freedom to run their business their way.

But when it comes to purchasing an established business, there’s a lot to be said for franchise resales. The main advantage here is that franchises are designed for a range of different owners. That makes it much easier for a franchise location to work under new ownership. Whereas, independent entrepreneurs tend to build businesses according to their own preferences and talent. Under new ownership, many of these businesses struggle.

Then you have the usual reasons for choosing a franchise over an independent business. A proven blueprint, plus training opportunities and corporate support, give franchisees a head start. Marketing tends to be easier with a recognized brand and corporate marketing materials. And by choosing a forward-thinking brand, you’ll be well-positioned for future developments in the industry. 

Resale Franchise vs. New Franchise

If you want to own and operate a franchise business, you have two basic paths to ownership. The first is to purchase the rights to a new franchise opportunity and develop your business from the ground up. The second is to purchase a resale franchise that’s already operational.

While many entrepreneurs would rather start a new franchise, others prefer resale opportunities. Resale franchises typically cost more than the startup costs for a new franchise. But they also typically come with less risk and a faster route to profitability.

Here are four other reasons that you might want to purchase a resale franchise instead of starting a new one:

      • Different Business Challenges. Some entrepreneurs love the challenge of building and developing a business. Others excel at managing an already up-and-running company. If you fall into this second category, it makes more sense to purchase an existing company. And if you prefer franchising, that means finding a resale franchise business.
      • Established Cash Flow. Any time you purchase a resale business — whether a franchise or an independent business — you benefit from existing cash flow. A resale franchise provides you with an established customer base, allowing you to become profitable much more quickly. Instead of starting in the batter’s box, you’ll be on second or third base.
      • Existing Infrastructure. In the same way that a resale franchise provides you with existing customers, it also provides you with existing infrastructure. You’ll have key assets in place, such as a physical location, marketing resources, back office systems, and equipment. And you’ll have a staff that’s already familiar with day-to-day operations.
      • Access to Protected Territories. If you get in on the ground floor with a franchise brand, you get your choice of territory. But if you’re late to the game, you might find yourself looking at markets with limited potential. Purchasing a resale franchise business will allow you to acquire the kind of territory you’re looking for.

Finding the Right Resale Franchise Business

Buying a resale franchise can leave you with a steady and reliable income stream for years to come. But if you purchase a mismanaged franchise or join a brand in decline, you’re likely in serious trouble.

One of the best ways to avoid this scenario is to hire a business broker. At Murphy Business, our brokers make it easy to navigate the franchise resale market, matching you with the right franchise business and the right franchise brand.

A great business broker also makes it easier to negotiate and close the purchase of a franchise business. Your broker can counsel you throughout negotiations and help you avoid common mistakes made when purchasing a business. Brokers can also refer you to legal and financial experts or help you acquire financing through local lenders.

Ready to buy a resale franchise business? Call Murphy Business at (888) 561-3243 today to request a free consultation!

How Murphy Can Help You Land the Ideal Business Opportunity

Finding the ideal business opportunity takes time, hard work, and perseverance. It also requires you to know what you want from a business — a step that many entrepreneurs forget. Even then, you may struggle to find the right business without help from someone who knows the market.

Murphy Business Brokers can help you find the perfect business.

Working with a Murphy Business Broker can make finding the right business opportunity a lot easier. Our brokers take the time to understand your needs, possess an expert understanding of the business sales market, and have access to private business listing networks. We’re also experts at negotiating and closing business transactions, as well as acquiring financing.

Understanding Your Goals & Situation

As an entrepreneur, your ideal business opportunity will depend on your goals, skills, and resources. 

When you meet with a Murphy Business Broker, we’ll start by exploring these factors. This way, we’ll understand what you’re looking for in a business. Just as importantly, we’ll know what you bring to the table. We want to match you with an opportunity that you’re passionate about and where you’re well-positioned for success.

To make this a reality, we’ll talk with you in detail about a wide range of considerations:

    • Your Short-Term Goals. Where do you see yourself immediately after purchasing your business? What types of challenges are you excited to tackle? Which would you like to avoid?
    • Your Long-Term Goals. What’s your ultimate goal as a business owner? At what point do you expect a positive return from your investment? Do you plan to sell the business at a later date or run it for as long as you can?
    • Your Ideal Market. What type of living situation do you want for you and your family? How far are you willing to relocate for the right business? Are you looking for opportunities in specific markets?
    • Your Skills & Experience. Which aspects of your professional background and skill set will be assets as a business owner? How can you harness your existing strengths? How much work will you put into learning new skills?
    • Your Budget & Resources. How much capital can you afford to invest in a business opportunity? How easily will you be able to acquire financing? What other existing resources can you bring to a new business venture?

Based on your answers to these questions, we’ll then conduct a search for your ideal business opportunity.

Finding the Right Business Opportunity

No one understands the market for business sales like an experienced business broker. What’s more, no one is better equipped to navigate this market.

At Murphy Business, our brokers enjoy access to a wide range of business listing networks, including private networks meant exclusively for brokers. At the same time, we have connections to other Murphy Business Brokers. This gives our brokers insider access to major markets in 35+ different states.

In addition to providing you with access to a wider range of business listings, we make it easier to identify and target high-quality listings

Having handled countless business sales and purchases — and having written countless business listings ourselves — we can navigate listings much faster than independent buyers, and we can identify quality listings at a much higher rate of success. This way, you don’t need to waste time going from listing to listing, trying to find the best fit.

Negotiating & Closing the Deal

Finding the perfect business opportunity is a complicated process. But once you’ve found the right opportunity, you still need to negotiate and close the sale itself. And that can be an even more complicated process for buyers.

By hiring a Murphy Business Broker, you’ll have an expert to guide you through these steps. We can assist or represent you in negotiations, help you avoid common pitfalls that occur during this stage, and connect you with qualified legal and financial experts.

Murphy Business Brokers can also help you acquire the financing you need to purchase a business. Our brokers maintain close contact with local lenders in U.S. markets, and we have experience helping buyers acquire both traditional financing and SBA loans.

Searching for the perfect business opportunity? Call (888) 561-3243 today to connect with a Murphy Business Broker and request a free consultation.