How To Buy an Existing Franchise
UPDATED: June 19, 2018
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Buying a franchise business can be a great investment opportunity. However, as with any investment you make, you must be sure to do thorough research before committing. Before you buy an existing franchise, you should assess your skill-set and financial capabilities. You will also need to determine your investment budget. Furthermore, many franchises require special knowledge, which may be difficult to learn on the job. Some examples of franchise business models that require special skill sets may include franchises for tax preparation, auto repair, or even some types of restaurants.
You should also think about your long-term business goals and the role you want to play in the franchise business, be it active or silent. After you determine your budget and the types of franchises that make sense for you, you may begin seeking out the right franchise opportunity.
Buying an Existing Franchise
There are several ways to begin pursuing a franchise business opportunity. One way to find out about potential franchise opportunities is to visit a franchise expo. This will allow you to investigate many different franchises under one roof. Franchise expos can be found easily through online research. If your interests are limited to specific franchises, these franchises will likely have websites or other outlets that you can refer to in search of more information.
Getting Legal Help with Your Franchise Investment
If you feel like you need more guidance, you may also enlist the help of a franchise lawyer who can help you determine what type of franchise is right for your business goals and budget. They can also help you navigate the paper work involved in completing a franchise agreement. While a lawyer can be a great help, keep in mind that they are paid on commission by franchise owners for each deal they make, so be sure that they have your best interests in mind.
Once you have narrowed your choice of franchises, you should review the Franchise Disclosure Document. The Franchise Disclosure Document is a document that provides you with crucial information about the franchise. The owner of the franchise is required by the Federal Trade Commission (FTC) to provide you with this document at least 14 days before you sign the contract or otherwise finalize the deal. The Franchise Disclosure Document is a good way to investigate a particular franchise, as it includes important information related to the business experience of the franchise owners, the fees, royalties and licenses involved, and a list of former and current franchise operations. You may also find it helpful to consult the list of former or current operations and contact the franchisees themselves to get firsthand feedback about the franchise you are considering.
A franchise attorney is also a great resource for finding a franchise that works for you. A franchise attorney can give you unbiased advice on the franchises that holds your interest. An attorney can also help you review the Franchise Disclosure Document and any other paperwork before you make a final decision.