If you are thinking about going into business with a franchise opportunity, you will first be faced with the decision of whether to purchase a new or existing franchise. Many people place an emphasis on a new franchise, but there are many advantages to buying an existing franchise. The following are three of these advantages.
A proven record
When a business has been in operation for a certain period of time, there are records of how well the business has performed. These records can demonstrate that the franchise is already profitable. How much revenue the franchise is generating as well as the profits can be demonstrated, and it is simply a matter of deciding whether the purchase price is right for you. By buying a franchise that has already demonstrated a certain amount of success, much of the risk that is associated with a franchise opportunity is taken out of the equation.
A customer base already exists
When you buy a new franchise, you are in a position of starting at ground zero without a customer base. You will need to build up a clientele, and this takes time. Many people believe that the franchise name is all you need to have customers, but with rare exception, you will need to develop a customer base like any other business. An existing franchise already has repeat customers. From this foundation, a new owner can build up even more customers with a good business and marketing plan.
Location and competition are not guesswork
An existing franchise already has a store location that has a demonstrable level of success. There is no need to speculate if the location of a franchise will hurt the chances of the franchise succeeding. This can be a big problem when opening a new franchise. Also, there is no need to guess about the effect on sales from competition. An existing franchise already has been in operation, and the sales will reflect how successful this existing franchise is against the local competition.
There are many franchises for sale that have demonstrated that they can make a profit for their owners at their present location and against the local competition. This can be seen from the sales and profits that come from paying customers that patronize the existing franchise. There are many existing franchises for sale with costs and revenue listed on the Internet. The Cold Stone Franchise cost and revenues are one example of this.