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Consider A Resale Franchise

consider-a-resale-franchiseYou’re considering going into business for yourself. Perhaps you’re looking into a franchise, but you’re not sure you’re ready to start a brand new franchise outlet. Even with all the support and systems in place to aid new franchisees, the thought of tackling a brand new franchise outlet can be intimidating to some. An attractive option for those individuals may be a resale franchise opportunity.

Franchises all over the country will routinely be resold by the previous franchisee for a variety of reasons. These outlets may be a little more “ready-made” for an immediate business opportunity, yet all businesses aren’t created equal. Also, you may not know which franchises are for sale.  Many times, the franchisee must work back through their franchisor in a resale opportunity.  You need to find the right guidance and investigate, there’s no substitute for performing your proper due diligence throughout the business investigation process.

Consider the following:


Look into the historical track record for the finances of the business. Ask to see balance sheets, tax returns and profit-and-loss statements. Understand from the franchisor how these numbers stack up against their other franchisees’ numbers in similar markets. Also, make sure you’re able to properly value the company based on that historical data. You may enlist the help of a knowledgeable CPA who can help determine the value of the business. 


Given the outlet is operating, you may be limited with the location of the business. But a good location is critical to the success of some businesses.  Find a business closer to the heavier traffic patterns. Also, check with the franchisor about other franchisees in the area and understand your ability to move the business without encroaching on another franchisee’s territory.


Spend time with the current employees and answer these questions: Are they happy? Do they like what they do? What is hindering them or the business from growing? You’ll find the employees could provide some really good insights into the functionality of the business.

The Franchise Itself

Most important, you’re going to want to spend time with the franchisor to get a feel for your ability to succeed in this franchise. Does your skill set match up with this particular franchise? Does your budget allow for you to invest in this franchise, set it on a course for success, and include enough working capital for yourself? Make sure you’re talking with other franchisees in the company to get their feedback – talk to ones who are doing well, others who are average, and some who are struggling. Who are you most like out of those three groups? Does the franchise have training programs in place for initial and ongoing training? These are just a few of the questions you should consider when investing into a franchise. As we’ve put in the blog before, an educated buyer is the best buyer.

FranNet Bio: FranNet is North America’s most respected leader in matching individuals with franchise ownership opportunities. Founded in 1987, FranNet has more than 100 experienced consultants across the United States, Canada, Germany and the United Kingdom. FranNet uses a proprietary profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and has matched thousands of prospective business owners to rewarding small business franchise opportunities. Based in Louisville, Kentucky, FranNet has been recognized by Inc. magazine as one of the fastest growing private companies in America for the last five years.

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