Buying a franchise that is for sale in California is a great way to become a small business owner and buying a franchise can be very profitable if you do your homework and select one that fits your needs.
There are two ways to get into the franchise world, buy an existing franchise that is already operational or buy into a franchise and open a new location. Here's some things you need to know about buying a California franchise for sale.
New Or Existing?
The first decision to be made is whether or not you will purchase a new franchise or an existing franchise for sale. With a new franchise, you will need to do everything such as selecting a location, designing the space, selecting staff and training them, marketing the business and lastly, work on building a customer base. It will basically be like starting your own new business except you will have the support of your franchisor. If you have selected a good franchisor, they will help you with a lot of the startup process. In this scenario you will almost always have some sort of franchise fee to consider.
If you're not up for starting from scratch, the other option is to buy an existing California franchise for sale. As I said, there is a specific page on bizben.com devoted to such listings, so check it out as a resource to see what types of franchise opportunities are available. You may just find one that fits your needs. Going this route, you won't have to deal with the startup process, but there will still be plenty of work to do.
As you are considering whether or not a new or existing franchise opportunity is best for you, one thing to take into consideration is franchise fees. The benefit of buying a franchise, new or existing is that you have the power of a brand behind you in most cases. You already have some name recognition with potential customers so you won't have to devote dollars to creating an identity for your company. All this along with a business plan for success comes with a cost of a franchise fee.
As I mentioned above, typically when starting a new franchise, there is always a franchise fee involved which can be expensive depending on the California franchise you are considering. If you are considering an existing California franchise, there can be a transfer fee that the franchisor requires you to pay as you are assuming ownership of the company.
As you are doing your research pay close attention to the franchise fee associated with the business you are looking at. Doing this can help you weed out which franchise opportunity may be right for you as some fees may be high enough to put the franchise out of your reach financially.
Select It And Get Moving
Once you've selected the franchise opportunity you will pursue the next step is to begin your research. I suggest you start by obtaining the Franchise Disclosure Document (FDD) and financial statements from the franchisor. The FDD discloses extensive information about the franchisor and the franchise organization which is intended to give the potential franchisee enough information to make educated decisions about their investments. You may want to review this information with your accountant, attorney or other members of your professional team to help you determine if this opportunity is right for you.
If the franchisor's FDD looks good start checking their references. Ask for a list of current franchise owners and past owners. Contact them and ask about their experience with the company. Were they happy with the income it provided? Was the franchisor easy to work with and supportive? Get as much information as you can about what it would really be like to own this franchise. This is valuable information that financials can't provide you.
Close The Deal
Once you have sorted through all this information and talked with other franchisees you should have a good idea as to whether or not buying a California franchise that is for sale is going to be right for you. Throughout this process, involve your professional team. Have people like your lawyer and your accountant review the information you obtain from the franchisor. They may see something you do not. Working with a business broker can also help you through this process. You can find business brokers listed on bizben.com. Finding one that specializes in franchise transactions can be beneficial. Once everything is in order, close the deal and enjoy the California franchise you bought!
About This Contributor: Peter Siegel, MBA is the Founder & Senior Advisor (ProBuy Program) at BizBen.com (established 1994, 8000+ California businesses and franchises for sale, 500 new & refreshed postings/posts daily). He consults daily with business & franchise buyers. Reach him direct at 866-270-6278 to sign up for future webinars on buying franchises or for advisory services.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Jeff Sacher, Business Broker - North Bay Restaurant, Retail Specialist
Jeff is a leader in business brokering in the North Bay. Since joining Santa Rosa Business And Commercial in 1999 he has assisted Buyers and Sellers in over 200 business sales and acquisitions. Jeff provides other services for his clients as well. Reach Jeff and his team at 707-888-4972.
|Rick Carlson, Business Broker - Southern California
You Will Never Feel Lost In The Shuffle. Many Brokers Simply Send Out An NDA And That's The End Of Communication. All Buyers Receive A Personal Meeting With An Ace Acquisition Specialist So They Can Recommend The Perfect Business For You. Phone Rick direct at 800-985-4939.
|Mani Singh, Business Broker, Inland Empire
I have successfully represented clients sell & acquire multitude of businesses ranging from Gas Stations, Liquor Stores, Markets, Super Markets, Smoke Shops, Postal Stores, Restaurants, General Retail, Auto and Construction related. Phone me for assistance with selling or buying at 951-296-7646 Cell
|Ryan Clark, Business Broker, Southern California
The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan at 310-652-8353.
|Manjit Singh: SF Bay Area - Business Intermediary
Assistance in the San Francisco Bay Area. Contact me about buying or selling a restaurant, liquor store, gas stations, markets, and c-store businesses. If you are looking to buy or sell a SF Bay Area liquor store, market, c-store, restaurant, etc phone me direct at 510-417-9429.
|Steve Zimmerman: Restaurant Broker Specialist
Steve founded Restaurant Realty in 1996. He has personally sold/leased over 900 restaurants, bars & clubs, & completed over 3000 valuations. The author of "Restaurant Dealmaker - An Insider's Trade Secrets For Buying a Restaurant, Bar or Club" available on Amazon. Reach Steve direct at 415-945-9701.
|Michael Davidson, Business Broker - Southern California
Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.
|George Lanza, Business Broker, At Plethora Business Sales
Plethora Businesses, a division of A Premier In Services, Inc., is a Business Intermediary Consulting Firm headquartered in Orange, California. Plethora specializes in the listing and sale of small and medium sized private businesses.
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