Buying an Existing Franchise Business

In Blue Mau Mau (www.bluemaumau.org) Ed Teixeira writes that anyone looking at buying a franchise should consider buying an existing franchise territory.  As Ed states, there are distinct advantages to buying an existing franchise business, including, existing revenue stream and customer base, the build-out of the store and equipment are already in place, and with some franchise systems that are more mature, buying existing businesses may be the only option to buy in the geographic area in which you wish to own the business.

Ed goes on to discuss the many ways in which an individual can find existing franchise businesses that are for sale, including contacting local business brokers and the franchisor.

It is important to realize, as I state to my clients who want to buy an existing franchise business, that there are two important evaluations that must be performed prior to the acquisition of a franchise business.  First of all you should have the franchise documents reviewed to determine if the franchise is one in which you want to be involved and invest your time and money.  This involves all of the reviews that we normally recommend for anyone buying a franchise.  Secondly, it is important to evaluate the business opportunity and to perform the requisite due diligence.  This includes checking for liens on the assets being acquired, reviewing the lease for the premises as well as any equipment leases, etc.  There are risks involved in buying any business, including a franchise business.  It is important to have an experienced franchise attorney assist you with this acquisition.

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