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The Advantages of Buying a New Franchise Business

There are many exciting franchise businesses available for new and experienced business owners. The franchise business model can offer a lot of advantages over starting a new business from scratch. Franchise businesses can provide their new owner with already established brand awareness, marketing potential, and customer base. If you are thinking about buying a new franchise business there are several things that you need to consider before you commit to paying the initial fee and tying yourself into an ongoing royalties agreement. To help you make your decision, this article will explain the main advantages of franchise businesses over starting a business from scratch.

1. Established Operating Procedures

The number one thing to consider when deciding between buying a franchise business or starting your own business is that a franchise will have established operating procedures already in place at all the other franchise locations. As a new franchise owner, you will be given extensive training in the operating system to ensure that your franchise will be successful. An underperforming franchise can hurt the whole company so it is the franchisor’s interest to make sure you are given all the necessary knowledge and expertise to run the business. We found this great blog at The franchisor can help with every step of opening a new franchise business such as locating the ideal site, overseeing the franchise build, hiring, staff training, and customer service protocols. After your franchise has opened, franchisors will continue to provide ongoing support to help you grow the business and to make sure that you are meeting their standards of product and service. The years of any new business are the hardest with 20% failing in their first year and 50% failing within the first five. Because of the support and knowledge that franchisees receive from the franchisor these numbers are significantly lower for new franchise businesses.

2. Immediate Brand Awareness

Buying a new franchise business will ensure that you have immediate brand awareness which can take significant time and marketing for a new business to achieve. Potential new customers will already be familiar with your brand and have a positive relationship with the company and so will already have a good idea about your products and services. If a customer has a good impression of the company as a whole or had a positive experience in a different franchise location, they will be confident that they will receive the same standards in your franchise business, even if it is brand new. Assuming there are consistent standards in all franchises, every individual franchise will have a shared good reputation. Customers will be far warier of a new business that they have never heard of and it can take valuable time for word to spread. With the vulnerability of start-up businesses in the first year, that immediate brand awareness can offer invaluable protection early on.

3. Start-up Savings

Despite the initial fee paid to the franchisor and the ongoing royalty payments, starting a franchise can be significantly cheaper than starting a new private business. As a new franchise business, you will have the full power of the mother company’s financial might behind you. That means that you will have significantly more money to spend than your local competition. This means your business will have a far better chance of standing out from your competitors and attracting new customers. Franchise businesses can significantly reduce supply costs as the company as a whole will either buy in bulk or mass manufacture their products. Because supply costs are so much lower, you will be able to offer your products and services at a price that local private businesses are unable to compete with. Essentially, you will be running your small business with the resources of a gIant national or even international company which gives you an enormous advantage over your competition.

4. Resale Value

If the time does come when you want to sell your business, you are likely to get a far better price for a franchise business than for your private business, for the very same reasons you bought it in the first place. A potential buyer will have weighed up the same considerations as you did about operating procedures, brand awareness, and cost savings. Often when you are trying to sell a private business, buyers will assume that you are selling because you have failed and will be wary about taking on a failed business. Alternatively, potential buyers may worry that your old customers will follow you and so even if your business has been successful, it will be impossible for a new owner to replicate. Whatever your reasons for selling your franchise business, however, the success of the mother company will reassure buyers that they will be successful and so you can demand a higher price.


For a franchise business, much of the hard work of building a brand, attracting a loyal customer base, and developing a profitable operating strategy has already been done for you. There are a great many advantages to buying a new franchise business rather than starting your own business. Do your homework and make sure that you understand every detail of your agreement with the franchisor and you will be well set to make the success of your new franchise business.