Franchise resale is the sale of an existing franchise business. Resales can happen after a few years or many years, depending on the owner’s circumstances.
There are many reasons why franchisees sell their businesses. Some of the most common include retirement, divorce, illness, relocation, entrepreneurial burnout, undercapitalization, and the company not being a good fit for the franchisee’s skills, interests, or goals.
Advantages of buying an established franchise business
There are many benefits to buying an existing franchise, including:
- An established revenue stream
- An existing local customer base
- A location with leasehold improvements, inventory, supplies, and staff in place
- A verifiable business history that can make it easier to obtain financing
- Built-in brand awareness
- Proven operating standards and systems
- Ongoing support from an experienced franchisor
- Validation by other franchisees
- An instant peer-to-peer relationship with other franchisees
- Helpful training and operational materials
- Assistance with regional and national marketing
- Economy of scale savings due to the franchisor’s purchasing power
- A defined territory that can help limit competition
Anyone exploring purchasing an existing business should consider looking into a franchise resale, with the most significant advantage being recordkeeping that provides actual proof of the company’s performance.