How do you buy an existing franchise?

How do you buy an existing franchise?

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A franchise is an agreement between the franchisor (or franchisor) and the franchisee (or franchisee), by virtue of which the former assigns to the latter the exploitation of the rights to use a certain name or trademark, as well as the production and marketing systems of the product.

There are several important elements that make up the franchise: the trademark that distinguishes the franchisor, a certain know-how and the training provided to the franchisees. In exchange for the assignment, the franchisor receives a royalty, royalty or fee that may be paid for the assignment of the trademark, the know-how assigned and the training and consulting fee.

In the European Union, EC Regulation 2790/1999[3] allows the assignment of exclusivity zones in which the franchisor is obliged to open or allow the opening of new units of the system, and the franchisee may be obliged not to make active sales in territories that have been assigned to other franchisees or reserved for exploitation by the franchisor itself. You would therefore be restricted from soliciting customers (active sales) in such territories if your contract had so agreed and when the areas where you seek them have already been assigned.

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Buying a franchise is a major financial investment and a serious personal commitment. One of the steps that will help you decide if it is right for you is to understand what your skills and objectives are.

When you buy a franchise, you can operate a business and sell goods and services under a recognized name. You buy a format or system developed by the franchisor, along with the training and support to operate it. But investing in a franchise, like all investments, involves financial risk. Franchisees must commit money and time, and must operate according to the franchisor’s rules.

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Buying a franchise is a major investment. How much money do you have to invest without risk? Are you in a position to lose your entire investment? Will you invest alone or with other partners? Do you need financing? Where will you get it?

As a franchisee, you own a business but do not operate it independently. You are part of a network and must follow established rules to maintain franchise consistency. A franchisor may limit your choices regarding sales areas, training, suppliers or other merchandise you sell. You may have to pay advertising fees and you may have to buy or rent from suppliers of the franchisor’s choice. If exercising your creativity is important to you, consider whether you will be comfortable working under the control of a franchisor.

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Some buyers succeed as independent business owners, while others are more likely to prosper as franchise owners. In reality, there are no easy answers to the independent business versus franchise dilemma. Instead, you’ll need to carefully evaluate the factors that differentiate the two approaches, talk to your family and trusted advisors, and decide which is right for you.

A franchise gives you more guidance, but less control. It is a business model in which the owner of the parent company (the “franchisor”) sells the rights to use its brand, logo and business model to an independent entrepreneur (the “franchisee”). Generally, the franchisor manufactures the products and gives them to the franchisee to sell. In some cases, the franchisor also offers services such as site selection, training, product supply, marketing plans, and even assistance with financing.

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How to buy a franchise in mexico

If you want to become independent or you have the necessary capital to start a project, but you have not been able to find an idea that you are passionate enough about, investing in a franchise may be the best option.

If you are looking to invest in a business but do not know how to start, or do not want to start from scratch, setting up a franchise offers you the possibility of starting your own company with a studied and proven business model.

In Chile there is no specific regulation or official association or guild in question. So far, the most formal organization is the Franchise Committee of the Santiago Chamber of Commerce.

You do not have to be a millionaire to enter the world of franchising. If you are sure about investing in this type of business, find out what financing tools you can count on, if you are sure about the success you will have once you acquire the business, you have more than enough reasons to go out and look for resources, however, it is always advisable to have some of your own capital.

How do you buy an existing franchise?
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