It is interesting that here at FranNet, a majority of our clients come to us with the preference of buying an existing franchise, but leave purchasing a new one. In this article, Curtis Kroeker , Group General Manager for BizBuySell.com and BizQuest.com, does a nice job of laying out the pros and cons of purchasing a new franchise versus an existing one.
With an existing franchise resale, you may find a business that is already running smoothly and generating cash flow. In addition, it will have some employees in place, perhaps a good location and the good will that comes from a loyal customer base. In buying a new franchise, you can start with a clean slate and no previous owner influence. It may be less expensive to get a new franchise off the ground and, you will have the advantage of the most up-to-date equipment and technology to help you run the business.
I would add only one thing to Curtis’s analysis. A huge advantage of purchasing a new franchise is that you can have the one that most closely matches your skill set and has the best chance of helping you reach your personal and professional goals. While there may be existing businesses with cash flow that can be purchased at a reasonable price, if it isn’t a good match for you, your chances of growing it to the next level may be compromised.