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  • Reasons to Buy a New Franchise

    Jan 8, 2019

    The knowledgeable & experienced business sale intermediaries at IBA, the oldest business brokerage firm serving the middle market in the Pacific Northwest, can articulate many reasons why it is preferred to purchase a mature company versus start a new business ranging from established revenues & profitability to existing customers & employees.  These and other compelling reasons have resulted in over 4000 successfully facilitated business sale transactions at IBA since 1975. However, a problem has always existed at IBA. We are contacted annually by many qualified, motivated business buyers interested in acquiring businesses in specific geographic locations and industries, but do not possess the inventory to satisfy this buyer demand.  Marketing can be performed to relevant companies to inquire if ownership is interested in sale, but the reality is that our business sale clients have to want to sell, few of our sell side clients need to sell. Retirement, a reason to sell at the end of a successful entrepreneurial career, is the most common motivation for business sale by our clients. This sale always occurs on the seller’s time table.

    To enhance the inventory we have available to offer to business buyers, IBA added new franchise sales to our menu of services in 2018 with the addition of Certified Franchise Broker, Curt Maier, to our talented brokerage team.  Mr. Maier through affiliation with The Franchise Brokers Association (www.franchiseba.com) represents for sale a high quality selection of the most successful and desired franchised business opportunities in the United States. He welcomes the opportunity to discuss franchise opportunities with interested entrepreneur.

    The following are some common reasons that entrepreneurs select to purchase & start a new franchised business opportunity versus buying established business:

    1. Location – Entrepreneurs are familiar with the products & services offered in their community.  Business opportunities that would be familiar and embraced by the community can often be identified and brought to the community by entrepreneurs through the acquisition of a franchise territory and selection of an appropriate location for the business. Proximity of career to home can also be a motivation for purchasing a new franchise, especially in light of a lack of appropriate businesses for acquisition in the area.   

    2. Industry – Entrepreneurs often identify growth industries and/or products and services that will have strong consumer demand. An efficient & effective way to enter into a new industry with a proven business model is to acquire a franchise in that industry.  

    3. Proven Franchises – Specific franchises have name recognition and reputations for facilitating entrepreneurial success. Entrepreneurs often find these opportunities attractive due to the lower perceived risk.

    4. New Franchises – The entrepreneurs that introduce new products & services to a marketplace often experience business success.  New franchises offer the opportunity to bring a new product or service to a marketplace with an established business model and base of market research that would be expensive & time consuming to reproduce.  

    Statistically, the highest probability for future success exists for a new entrepreneur when a mature, profitable business is acquired from the prior owner with a quality transition period.  The second highest probability of future success exists when a proven business model is employed by a start-up business. Franchises offer a great opportunity to use a proven business model as an entrepreneur. The entrepreneurial start-up with the lowest probability for success is a new business model.  The one ingredient necessary for success in all scenarios is an individual with appropriate business acumen, knowledge, and experience. If entrepreneurship is your 2019 career choice, we would welcome the opportunity to present you with a selection of options to consider as a path forward.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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