If you're considering buying a franchise, there are several places you can look. If you have a pretty good idea which franchise you're interested in, the most obvious place to start is with the franchisor. The franchisor can give you all the information you'll need about purchasing a franchise.
An alternative that isn't so obvious but that can achieve the same result, and possibly at a savings, is to contact existing franchisees who are looking to sell their franchises. You may save money because you are not paying the franchisor a franchise fee since you are taking over an existing franchise.
You may, however, pay the equivalent of a franchise fee to the franchise seller if the seller is asking a premium for the franchise being sold. You can determine whether the premium is reasonable by comparing it to the cost of a franchise fee for a new franchise. A franchisor may be able to provide you with the name of an existing franchisee who is looking to sell its franchise. Finally, some franchisors may buy back and operate franchises from franchisees until they can find a suitable buyer.
Another good place to look is at annual franchising trade shows. These trade shows provide an opportunity to talk to many franchisors and industry experts in one location. Often, the shows will have seminars to educate potential franchisees on what they can expect and the advantages and disadvantages of being a franchisee. Details of trade shows can be obtained on the Internet at Trade Show Central and The Ultimate Trade Show Resource.
Where to Look
- Newspapers. Most newspapers, from large metropolitan publications to small local publications, have a classified ad section in which businesses and franchises are listed for sale. Some, such as The Wall Street Journal, even have a specific classified section of businesses for sale.
- Internet. If you have access to a computer with an Internet connection (which you probably do if you are reading this), there are many Internet sites that list franchises for sale. There are more sites appearing all the time. You can do a general search of sites that offer franchises for sale, or you can do a specific search for the particular franchise operation you are interested in. Since this is a relatively new method of locating businesses for sale, you should approach this method cautiously.
- Business brokers. Another route to finding a franchise is to go through a business broker. A business broker matches people who want to buy a franchise with people who are selling one. One of the benefits of using a broker is that the broker, at least a good one, will screen franchises that are for sale to determine if there are major problems and to make certain that the franchise being sold exists. However, the broker's fee to sell the franchise will probably result in a higher sales price for you.