Buying the Best Franchise Resale: 5 marks of a great franchise
In today’s world, more and more people demand variation, freedom, and satisfaction in their business. Gone are the days where we stick with the same job or same business for 20 plus years.
More than ever before, we want to invest in and enjoy our business in the present, and then we want to have the ability to move on to something new or different in the future. Additionally, many of us desire the confidence that a proven franchise model provides, but we lack the patience to wait the 3+ years it can take to build a new franchise from the ground up.
These are the realities that drive many to buy an existing franchise, and is why franchise resales will continue to grow in popularity.
If you are one of the growing number of individuals looking to buy an existing franchise, there are 5 marks that will help you identify the best franchises to buy. It may come as a surprise to some, but the name of the brand and the industry of the business are not the most important qualities to consider when evaluating the purchase of an existing franchise business.
In a nutshell, 5 of the most important qualities are:
Transferability. Flexibility. Profitability. Growth Opportunity. Community.
Now, there are many other benefits to being part of a good franchise system, but if you buy a franchise resale that lacks any of these 5 marks, it may not be long before you notice something important is missing.
Although somewhat self explanatory, let’s briefly look a little closer at each of the 5 qualities of the best franchises to buy.
Transferability. Would you buy a stock you could never sell, or work a job you could never promote from? Probably not, unless the stock paid exorbitant dividends or the job paid outrageous wages.
If you are buying an existing franchise or a new franchise, you want a strong degree of confidence in your ability to sell it when you are ready to move on. Selling your franchise after you’ve invested your blood, sweat, and tears into it is a fundamental part of the American Dream, and the ultimate satisfaction in business. It may be a long way off, but that day will come. Buy a franchise resale that enables you to cash out when it’s time to sell.
Flexibility. One sign of a great franchise system is when there is flexibility in the degree of involvement by the franchise owner. Whether you are heavily involved in the day to day operations of the franchise, making a passive investment, or fall somewhere in between, if the franchise provides the flexibility to work in the role you love and do best, it’s a big win! Buy a franchise resale that offers flexibility in when you work, how much you work, and what specific work you will do.
Profitability. The importance of profitability needs little explanation. However, when buying a franchise resale, it is important to look beyond the recent profitability of the operation you are evaluating. Ask, what should the profitability be? If you are considering buying a franchise resale that is less profitable than others in the system, then you may have a great opportunity to buy a franchise at a lower price, and then flip it into a more profitable, more valuable franchise business! Buying a franchise that is less profitable does not mean there is less opportunity for profit.
Growth Opportunity. Building your own “empire” is part of the fun for business owners. Great franchise brands make multi-unit operation easier and they often provide a smooth pathway for expansion and increasing the value of your franchise entity. If you want to have considerable opportunity to grow your franchise, look to buy a franchise resale in a system that provides the ability to open or acquire additional franchise units when you are ready to expand. If you discover there are many multi-unit operators in the franchise system, chances are you’re on the right path.
Community. Operating any business is difficult, especially on your own. Having a franchisor as your partner can alleviate much of that burden. However, being part of a franchise organization that facilitates a vibrant community among the franchisees is priceless. Being able to share ideas, successes and struggles with your peers who wear the same shoes is comforting in the difficult times, and it is downright fun during the good times. One of the best things you can do is buy an existing franchise that has a healthy franchisee community.
As you consider the right franchise for you to buy, filter your best and final options through these 5 essential qualities. You may have other factors that are important to you, but don’t put too much weight on the name of the brand or the industry of the franchise. You may find these 5, less obvious factors, are the factors that truly contribute to your success and satisfaction in your business.
Finally, if you haven’t recently perused the Franchise Flippers marketplace, be sure to check out the many great franchise resales available.