February 22, 2013

Buying a franchise is a big decision for anyone, especially those new to working in the franchise industry.

It is important for individuals interested in becoming a franchisee to understand the company and its market.

One question that many individuals have difficulty in deciding is whether to buy a new franchise or an existing franchise business. To answer this question it is best to understand both the challenges and opportunities of buying a new and existing franchise. Once an individual has analyzed the pros and cons of both types of franchises, he or she should be able to make a well-informed decision that should help the success of the franchise in the future.

What are the advantages of buying an existing franchise? Below are the pros of buying an existing franchise:

• Existing franchises already have a track record that can make it easier to be profitable.
• Existing franchises already have a customer base that understands the company and is loyal to the brand.
• Existing franchises usually have more flexibility in negotiating the terms of the franchise agreement.

It is also important for people to understand the advantages of buying a new franchise, which are listed below:

• New franchises won't have any possibilities of having a bad reputation or negative customers.
• New franchises are usually less expensive to purchase.
• New franchises usually have new equipment and facilities, which can be very important in certain businesses.

Buying a new or existing franchise can be a great opportunity but it is important to understand the franchising industry as well as the risks. It can be beneficial to consult a business law attorney to discuss the advantages and disadvantages of working in the franchise industry as well as how to decide what type of franchise to buy.

Source: Inc, "Franchise: Buy New or Used?" Feb. 21, 2013