What is the Difference Between a Small Business For Sale and a Franchise?

Franchises exist in all realms of business and are certainly not limited to food chains and carpet cleaning services. Literally thousands of businesses are franchises throughout the country and all over the world. Whatever kind of business you are hoping to purchase, you can certainly find a franchise option. Before deciding this is the best choice for you, it is essential to understand the difference between a small business that is for sale and a franchise chain.The purchase of a small business is fairly simple. The seller and you come to a decision on a reasonable selling price and papers are signed. A final date is set and you move in to take control of all the business assets and operations. Most of the time, your relationship with the seller ends after the purchase of the business, but sometimes, like in the case of network marketing businesses, the previous owner will continue to earn residual income as you successfully run the business. In almost every other case, though, you are on your own after the sale takes place.With the purchase of a branch of a franchise, the relationship between you and seller stays in place after the purchase. You become the franchisee and the seller is the franchiser. They collect a fee from you up front that pays for brand name recognition, a business model to follow, training for yourself and that of future employees as well as continuing support. You also continue to give the franchiser a percentage of your revenue to pay for these ongoing benefits. As the owner of a franchise, you must follow specific guidelines for running the business to keep it consistent with the other branches of the company. You may have noticed that every McDonald’s, JCPenney and Wal-Mart looks and operates the same. This is because every franchisee follows the procedures set up by the franchiser.Some people prefer the comparative simplicity of purchasing an individual small business while others are intrigued with the idea of owning part of a franchise. No matter which one you choose, there are countless niches you can choose from to find the best business for you to own. Remember, buying a small business franchise is much less capital-intensive than building one from the ground up, especially a franchise guru like McDonald’s. You can have the benefits of name brand recognition without the huge expenses of starting a business from scratch by finding the right franchise to purchase.

» Tags: , , , , , , , ,

Comments are closed.