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What are the benefits of a franchise resale?
The biggest difference is that, providing you do your research properly, you will know exactly what you are buying when you take on an existing franchised outlet and have the trading history of the outlet you will be running on which to base your business plan. When you open a new franchised outlet, however well the system may have performed elsewhere, there is always the slight doubt 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’ it may well have been that they just were not personally suited to that particular business. If more than one franchisee has previously done badly with the outlet, 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. Bear in mind you may have to make some equipment replacements sooner rather than later, but you can do that out of profits rather than borrowing for capital expenditure.
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