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 925-785-3118 to sign up for future webinars on buying franchises or for advisory services.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Mike Brewer: Liquor License Brokers, ABC Consulting Services - California
Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.
|Bob Baumgarten, Business Broker: Orange, LA Counties
National Business Brokerage is a full service brokerage company that has been serving buyers and sellers of Southern California businesses since 1994. We are dedicated to providing the highest standards of professional service for our clients. Phone Bob direct at 949-588-8727.
|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.
|Timothy Cunha, JD - Business Broker, SF Bay Area
I am an experienced entrepreneur, attorney, & business professor. I & my EvergreenGold team offer business owners sound advice & expertise to build business value & achieve profitable sales. Call me today for a FREE business evaluation & SWOT analysis for your business anywhere in the USA.
|AJ Rana - Business Broker, San Francisco Bay Area
Professionals who understand the importance of world class business brokerage service and the value it can create. Specializing in assisting sellers and buyers with retail stores, restaurants, hospitality & lodging, manufacturing operations, distribution companies, e-commerce and service businesses.
|Prabhjot Randhawa, Broker: SF Bay Area, Northern Central Valley
I'm a Business Advisor at Liberty Business Advisors of San Fransisco. I have over 20 years of experience in all phases of entrepreneurship. During the past 15 years my concentration has been in business of mergers and consulting. I have owned and operated over 10 businesses.
|Chris Seaman, Business Broker - San Diego County Area
Founded in 1994, First Choice Business Brokers has accelerated to become one of the most successful Business Sales Organizations in the world. Our team of agents have gone through extensive training to become experts in the field of business brokerage. Call Chris at 858-578-4111 for more info.
|Harry Sidhu, CBB, Broker: SF Bay Area, Central Valley, SAC Region
Assisting both sellers and buyers of businesses - dealing mainly with Liquor Stores, Grocery Markets, Gas Stations, Smoke Shops, Restaurant Related, Retail Related, Service Related. Serving SF Bay Area, North Bay, Sacramento area. Call Harry Sidhu, CBB for assistance at 510-366-6130.
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