How does buying an existing franchise differ from investing in a new one?

The biggest difference is that you will know exactly what you are buying when you take on an existing franchised outlet and you will have the trading history of the outlet you will be running on which to base your business plan. When you buy a new franchise, there is always the slight doubt that it may not work in your town.  Depending on the reason that an existing unit has become available, you may think that you can improve its performance - and you will have an existing customer base with which to work.  If the previous franchisee has ‘failed’, then it may well have been that they just were not personally suited to that particular business. If more than one franchisee has done badly, you can start to ask questions as to whether the franchisor’s recruitment process is any good.  Sometimes a successful outlet is being sold, complete with all its equipment and a base of satisfied customers, but you can acquire it for much less than it would cost to set up a new one - simply because you are not paying top price for all the set-up costs.