Buying a Business or Franchise

Buying a Business or Franchise cont...

Buying a Franchise

One of the principal advantages of buying a franchise is that the franchiser already has an established business method and usually offers continuing support in all aspects of the company. There are however risk, such as opening in an underprivileged and/or unprofitable location, loss of absolute control, and significant up-front cost and ongoing fees to the franchiser. Before making a decision, you’ll want to do several things, such as review the franchiser’s financial statement along with copies of profit and loss statements on the franchise locations of choice. It will also be wise to identify any imminent lawsuits. There’s also an option to speak with existing franchises about success or limitations of their operations. Most franchisers will be glad to give references. You just have to ask. Also keep in mind that “pro forma" financial statements are merely estimates of future predictions. So they should not hold too much weight.

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