Buy a Franchise

Buy a Franchise
Buying a franchise is one of the most popular ways to start a business. By acquiring a franchise,
you open yourself up to the possibility of selling products and/or services that have instant name
recognition. You will also benefit from the training you will receive at the beginning as well as
the ongoing support to help you become successful. Like any business venture, there are costs
associated with purchasing a franchise. You may pay some or all of the following fees to the
franchise: initial franchise fee, ongoing royalty payments, and advertising fees. Other start up
costs will include rent, build-out, equipment, inventory, licenses, and insurance.
There are two common ways for participating in a franchise program.
• The classic method is to buy a new franchise. This means you will have to find a
location and do the build out yourself. This is a start-up situation and you dive
into the new business as an owner/operator. Many successful entrepreneurs have
built multi-unit empires this way. Newer franchises usually provide this route for
business ownership. During the process, you will have the assistance of the
franchisor.
• The other way is to buy an existing franchise. Several types of franchises are
available in various industries. To find a franchise of your choice, you can attend
franchise trade shows with the goal of visiting exhibitors in an industry that has a
strong appeal to you. While listening to the presentations given by the exhibitors,
be sure to get answers to some of the following questions. How long has the
franchisor been around? How many franchise units exist in your local area and
where are they located? What is the initial franchise fee and are there additional
start-up costs? Are there ongoing royalty payments and if so, how much are they?
What assistance is provided at the beginning and on a continuing basis? What
controls are imposed by the franchisor?