Advantages and Disadvantages of Buying a Pre-existing Franchise

This article will discuss the advantages and disadvantages of purchasing a franchise that is already in existence.
Before purchasing an existing franchise, speak to a franchise attorney in Washington DC. An existing franchise has several advantages that make it very attractive to acquire. Some of these include:

· Financing – existing franchises are easier to finance despite needing capital financing [Definition of Capital Financing | Bizfluent]. This is because you have access to the history of how the business performed in the past years up to that point. While there is no guarantee that the business will perform in the same manner, it creates confidence in the lender that the business has revenue records.

· Functionality – A new franchise requires to be built up. However, with an existing one, the franchise has already been built and is in operation.

· Customers – Pre-existing franchises have the advantage of an established customer base. As a result, there is faster revenue realized as the customers already exist than new franchises that have to work at building loyalty and revenue over time.

· Presumably, there will also be a marketing strategy in place, which will help generate more customers on an upward trajectory. 

With these advantages come some challenges that must be dealt with. For example:

· Pricing – with all the advantages and success of a pre-owned business, there also comes a high-priced tag. In addition, an already established franchise can provide a track record of how they have performed and thus may end up costing more than setting up a franchise from the beginning. 

· Fulfilling all the requirements that the franchisor has to accept for the transition to occur. They may be cumbersome and might require a significant investment of time, money, and energy. 

· Change – there might be some practical implications for employees and customers alike when the owner changes. 

If you are debating whether to purchase an already established franchise or purchase a new franchise, contact franchise attorney Mario Herman for more information.