If you’ve decided that a franchise is for you, the next decision will be whether you should build your own new franchise location or buy an existing franchise. How do you decide what’s best for you? Let’s look at the two options.

If you are leaning towards starting a new franchise location, then one of the possible benefits you can expect is choosing your own location. You will not have to worry about the reputation the business gained (good or bad) under previous ownership as the slate is clean. You will get to make all key decisions in terms of location, staff, and (depending on the franchise) design.

Another big plus? Everything will be new, from the furniture and equipment to the attitudes of the staff. You won’t have to contend with aging equipment or burned out employees.

There are, however,  big downsides to starting a new franchise location. The biggest is the cost. Around 90% of the time it will be far more expensive to start a new franchise location that it would be to buy an existing location.

Why? Not only do you have the costs associated with any start-up business (like build out, furnishings, equipment, permitting, licensing and the like), you will also have a set of franchise fees you will need to pay. It will be far less expensive to buy an existing franchise location and then pay the associated franchise transfer fees.

Another big bonus of buying existing is you are buying a proven location. New locations always come with the added risk that the location won’t support enough business to keep the doors open.

Systems and staff are already in place and the equipment and furnishings that are in place are there because they work and have proven to be necessary.

You are also buying an existing customer base, who already knows you are there and what to expect.

For most future franchisees, it is a far better bet to find and buy an already existing location instead of trying to start a new location from scratch. The risks and costs involved will be far fewer with a proven business.

Are you thinking about buying or starting a franchise, but you have more questions? Please feel free to leave us a comment or question here, and we would be happy to help.

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907

https://infinitybusinessbrokers.com