Question

When planning as entrepreneur, what are the reasons and advantages of purchasing a franchise instead of buying an existing business?

Answer 1

okay! so as an entrepreneur you need to think about many things because it will cost you money so can't throw it just like that.

so first we would look at what is a makes franchise different from an existing business.

franchise has its own very good goodwill and but compared to bussiness can only be bought if they are not going well adn you think that you can make them work well, so in short you should buy franchise when you want to lay down and doesnt want to worry about anything much, but it wont help you make money that you cant even countit might limit your money like ou can only earn upto the limit and you have to sometimes share your earnings also, but if think about business it a lot of risk involved in them because of the following reason:

• why would a person let you have their own business made by their hard work, maybe they know that something wrong going on inside of the business which will it suffer huge losses or maybe ending up with just debts, may be they know you are fool enough to think that you can run their business more than they could and they can sell you for more than the business is making for them.
• you need to have a lot of knowledge about the market as well as industry and that business because you are an entrepreneur, there's no way you know more about that company than the people running it, so it's just like diving in a sea without knowing whats in that sea!

if we talk about the advantages of purchasing a franchise, they are as follows:

1. you need not innovate something new they have all the things set up for you.
2. you need not create any new market for your products, people already know about your product, which means you need not to worry about the sale, which means you are going to earn which is the most important thing no matter in what business you go into.
3. you need not do marketing as compare to the existing business until you have a special offer for your customers sometimes that also need not worry about, I would like to remind you the most expensive is marketing, it cost you a lot of money!

there are many other reasons also but as a finance guy, i can tell you these are things that matter the most to run any business.

hope, I am able to solve your query, in case you need any further assistance in any case matter, please feel free to ask.