Reselling franchises might be your best route to franchise ownership. Here's why.

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Franchising can be a great way to become a business owner. Look for a proven operating system, strong profitability at the unit level, an excellent management team, differentiated and valuable product/service offerings, and satisfied franchisees.

Most people who consider starting a franchise business end up considering developing new units. This is because most franchise marketing opportunities are geared towards selling new units. You may not even think of buying an existing unit or a group of units. But if you're considering starting a franchise business, resale options should definitely be on your radar. Don't forget that resales can also be combined with the development of new units! So this is not a case of "either/or" (new OR resale) but could be "yes/and" (new AND resale) for the right buyers.

Related: The Pros and Cons of Reselling Franchises

Evaluating resale options is a great way to understand the potential value of any system you are considering. How much do units sell for when owners retire? Is the brand too young to have a long resale history? Do resales go to existing owners who want to expand (because their franchisee experience is positive), or only to new operators (who aren't as familiar with the brand)? Do owners leave after a long tenure with a history of good cash flow, or soon after joining because it didn't work out? You can tell a lot about a system by looking at resales.

Second, stepping in to run a business that is already generating cash flow may be more suitable and less risky for many potential franchisees. This existing cash flow can help you acquire more units or build new units much faster than if you had started from scratch. With a resale, the business is already in operation. You'll have a much better idea of ​​the company's potential, competition, and areas for improvement.

You can visit the site or the territory. You can do a mystery shop and potentially meet the staff. You can assess existing marketing campaigns and spend and impact on revenue. You can view multiple years of trading results, including what happened during the pandemic. When you're starting a franchise from scratch, you can never be sure if a concept will resonate or if you'll be able to find a good location. You also need to hire and train your entire team. The complete establishment of a new franchise unit can take up to three years. Yes, getting into a working business is a bit like drinking from a fire hose, but if you carefully assess the business and have confidence in the existing team in place, you can get off to a quick start. p>

Related: What's Old Is New Again For These Two Resale Franchisees

Remember that franchise salespeople earn a commission on new unit sales, not usually on resales. Keep in mind their incentives if they give you advice. Large franchise systems usually have strong resale programs and established processes. But it often takes time for smaller brands to manage transfers in a coordinated fashion. Don't be discouraged if a younger system doesn't yet have a properly functioning resale program.

There are business brokers in every community with franchise resale options. You can also approach the owners directly and...