Key Takeways
- One of the biggest benefits of purchasing a franchise for resale is that it likely already has an established customer base.
- By purchase a franchise for resale, you able to know for sure what you baseline revenue is and you can then build it up from there with aggressive marketing.
- When you purchase a franchise for resale, you are essentially buying into a proven business model.
- While a franchise for resale may already have an established customer base and proven business model, there is still plenty of room for growth.
Are you thinking about buying a franchise? If so, you may be considering purchasing one that is already established and up for resale. The franchise industry term for this is called “Franchise for Resale.” While starting a new franchise from scratch can certainly have its benefits, there are several advantages to purchasing a franchise for resale. Here are just a few reasons why owning a franchise for resale could be the right move for you:
1. Established Customer Base
One of the biggest benefits of purchasing a franchise for resale is that it likely already has an established customer base. This means you won’t have to spend as much time and resources on marketing and advertising to attract new clients. Instead, you can focus on providing excellent customer service and building relationships with the people who are already familiar with your business.
By purchase a franchise for resale, you able to know for sure what you baseline revenue is and you can then build it up from there with aggressive marketing. Perhaps the previous franchise owner you are purchasing was an absentee franchise owner and you plan to be a hands-on operator so you can take the location to new heights.
2. Proven Business Model
When you purchase a franchise for resale, you are essentially buying into a proven franchise business model. This means that the systems and processes for running the business have already been put in place and have been proven and successful in the past. This can provide a sense of security and stability for new franchise owners, as they know what works and what doesn’t.
When purchasing a franchise resale, you can request the P&L from the franchise broker or previous owner so you can gain transparency on the numbers and in many cases even see what the net profit or EBITDA for the store is.
3.Training & Support
Many franchisors offer training and support to new franchise owners, and this is especially true for those who are purchasing a franchise for resale. This can be extremely beneficial for those who are new to the world of business ownership, as it can help ensure that you have the skills and knowledge you need to be successful.
Most franchisors will offer on-site training as well as training at their company headquarters for new franchisees. You will be provided with an in depth franchise operations manual and most franchisors and a plethora of resources available to you as a new franchise partner.
4. Efficient Use of Resources
Starting a new business from scratch can be a time-consuming and resource-intensive process. By purchasing a franchise for resale, you can save time and money by taking over an already established operation. This can allow you to focus on growing and improving the business, rather than getting bogged down in the details of setting everything up from scratch.
The franchisor can help to provide you with your food cost and most offer inventory management systems that will help you easily calculate your COGS (cost-of-goods-sold).
5. Potential for Growth
While a franchise for resale may already have an established customer base and proven business model, there is still plenty of room for growth. By taking over an existing franchise, you have the opportunity to put your own stamp on the business and make changes that will help it thrive in the long term. This can be especially rewarding for those who are looking to make a real impact in their business and see tangible results.
With your franchise resale being your first location for the franchise you are buying into, once you are happy with the profit you can continue to grow and open more locations with the franchise.
6. Reduced Risk
When starting a new business, there is always a certain level of risk involved. By purchasing a franchise for resale, you can reduce this risk by taking over an already established operation that has a track record of success. This can provide a greater sense of security and stability, especially for those who may be new to business ownership.
Having an established starting place with an existing regular customer base and regulars will provide you with a significant advantage in getting started with a franchise.
7. Stronger Negotiating Power
When you purchase a franchise for resale, you are in a stronger position to negotiate the terms of the deal. This can be especially beneficial if the current owner is motivated to sell quickly or if the franchise has been struggling in recent years. By negotiating a favorable deal, you can potentially save money and get a better return on your investment.
Many franchisors have national pricing set-up with distributors so you can leverage the buying power of all of the franchise locations in the country to getting you much better pricing than you would have if you started your own business.
8. Potential for Lower Upfront Costs
Starting a new business can be expensive, as there are many upfront costs to consider such as franchise fees, training expenses, and equipment purchases. By purchasing a franchise for resale, you may be able to negotiate a lower price and potentially save money on these upfront costs.
With a resale, you will have precise clarity on on the total cost of the business compared to only having a range if you started a new franchise.
9. Immediate Income
When you start a new business, it can take time to build up a customer base and start generating revenue. With a franchise for resale, you can potentially start making money right away thanks to the established customer base and proven business model. This can be especially beneficial for those who need to start generating income as soon as possible.
Because your franchise location purchased from resale already has existing cash flow, you can use the cashflow to fund the business is it’s profitable without the need for much working capital.
10. Opportunities for Expansion
If you are looking to grow your business, purchasing a franchise for resale can be a great way to do so. By taking over an already established operation, you have the opportunity to expand and potentially increase the franchise’s reach and customer base. This can be especially rewarding for those who are looking to make a real impact and see tangible results from their business endeavors.
If you are able to grow revenue and profitability for your first franchise resale, you may want to consider repeating the process and purchasing additional franchise resale stores with the same franchise. With multiple locations with the same franchise, there are certain economies of scale that you can leverage in marketing multiple locations within the same geographical regional and potentially also with higher ordering volume.
11. Opportunity to Learn from the Previous Owner
When you purchase a franchise for resale, you have the opportunity to learn from the previous owner and benefit from their experiences running the business. This can be especially valuable for those who are new to business ownership, as it can provide valuable insights and help you avoid common pitfalls.
The previous owner can give you advice on what marketing tactics worked and what they haven’t tried yet which will be very helpful in creating your marketing strategy.
12. Ability to Benefit from Existing Relationships
13. No need to Spend Time and Money on Branding and Marketing
14. Reduced Learning Curve
Starting a new business can be a steep learning curve, as there are many things to consider and processes to put in place. With a franchise for resale, much of this work has already been done and there is a established system in place. This can make the process of becoming a business owner much smoother and more efficient.
15. Potentially Higher Return on Investment
In summary, owning a franchise for resale has many benefits, including the opportunity to learn from the previous owner, the ability to benefit from existing relationships, no need to spend time and money on branding and marketing, a reduced learning curve, and potentially a higher return on investment. If you are considering a franchise opportunity, be sure to consider the option of purchasing one that is already up for resale. You may find that it offers all of the advantages of starting a new franchise, with fewer of the headaches and hassles.
We would strongly recommend looking in potential franchise resales that are available for Pure Green Franchise. Hit the “contact us” button below and ask for any available franchise resales that are available for Pure Green Franchise.
THE FUTURE OF BUSINESS: NAVIGATING MASTER FRANCHISE OPPORTUNITIES
