Another Way To Buy a Franchise

If you’ve been on the hunt for a franchise to buy, and haven’t found one that you feel is right for you; I have an idea that you may want to explore.

My idea isn’t exactly cutting-edge, but it could be a welcome addition to your list of opportunities.

Investigate Franchises For Sale

There are probably franchise businesses for sale in your geographical area. By franchises for sale, I’m referring to existing franchise businesses that are already up and running. Interested?

Here are 3 things you need to know about franchise businesses that are for sale.

1. You’re probably not going to find them using a simple online search on Google or Yahoo!

The reason: Most franchise resales (that’s what they’re called by people in the franchise industry) aren’t advertised. While it’s true that you may run across an ad or a listing naming a specific franchise brand*, the actual, specific area it’s located in won’t usually be named.

2. You may not find out the true reason the franchise was for sale until after you buy it.

The two most common reasons businesses are for sale-reasons given by the business owners themselves, are retirement and health.

Either the owner is ready to retire, or the owner’s health is making it hard to keep up with the demands of owning and operating a business*. Both of those reasons are legitimate reasons for wanting to sell a business. But, what if you find out that the reason given by a business owner for wanting to sell the business you just purchased was not the real reason? What if it was something else?

Just some food for thought. 

3. Financing an existing business can go either way.

Sometimes the books, including a business’ financial statements etc. look really, really good. Good enough for a lender to approve a buyer’s loan relatively easily. But, sometimes a businesses’ books don’t look so good. In those cases, there are two words you’re going to hear: Owner financing.

An owner financing arrangement involves the seller financing a portion of the sale. And, since the business owner isn’t a bank, there are no hard and fast rules on things like loan term and interest rates. If you end up buying a franchise business where there is owner financing, be prepared to sell yourself. You’ll need to convince the owner that you’re more than capable of running a profitable business, and that you’ll have no problem paying back the loan. 

Where To Find Franchises For Sale

If you’d like to know what franchises are for sale in your area, there are a couple of ways for you to find them.

1. Contact a local business broker

Not only are franchise businesses and even non-franchise businesses for sale in your neck of the woods, there are probably a few business brokers nearby, too. A business broker specializes in helping small business owners sell their businesses. But, brokers work with business buyers, too, and will enthusiastically show serious potential business buyers their listings.

To find a local business broker, contact a couple business attorneys or CPA’s in your area, and ask for a referral. Another way to find a local business broker is to go to the International Business Brokers Association (IBBA) website, and search their member’s directory*.

2. Search business for sale websites

There are several websites that focus on providing information on businesses that are for sale. Most of them have separate areas that list only franchises for sale. Here are some sites:

GlobalBX.com*

BizBuySell.com*

Businesses For Sale.com*

National Franchise Sales.com*

Buying an up and running franchise business is one option that’s often overlooked by people looking to buy a franchise. If you’re in the market for a franchise to own, purchasing an existing franchise business is one option worth checking out.

*Non-U.S. Government links

Wikimedia image credit

(I’m The Franchise King®, Joel Libava, and I originally wrote this article for the U.S. Small Business Administration's blog. Used with permission.)