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Advantages of Buying a Franchise Resale

Franchising has been providing Americans with business opportunities for over 150 years, and as more franchise companies are becoming established, the number of businesses bought through the sale of existing franchises is becoming more and more popular.

The benefits of purchasing a franchise which is already trading are clear to see:

  • Cash flowing through the business from day 1
  • Brand presence in the local market place
  • Clients and customers from the start
  • Stock, staff and property (if appropriate) all in place
  • Business planning is easier to develop from known data
  • Smoother funding process due to the proven business history

Developing a business presence in a new territory can be time consuming and costly so the advantage of taking on an existing franchise, that is already known in the area and which has current customers and clients, is clear. That is not to say growing any business is easy – far from it – but it is easier to move on and drive a process that is already underway. To speed up a rolling ball as opposed to starting it from a standstill position is always the energy efficient option.

The above positive elements which demonstrate why a franchise resale would be a strong option to consider also make the opportunity attractive to secure finance for your new business. All businesses will usually require some form of banking facility and many will require additional funding most often in the form of a loan. If not a loan then, at the very least, an overdraft facility is usually required to support a level of working capital.

When presenting a structured business plan to a bank to secure these facilities, the strength of the proposal and therefore the likelihood of its being approved will, in part, depend on your business projections. With an existing business there is clear evidence of what has been achieved by the current owner, so projections can be based on fact and this will give considerable weight to the proposal. This in turn will make it more likely to be accepted because the previous revenue history and brand presence, plus your drive and background all combine with a franchise resale to make this option the logical route into franchising.

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