Buying Into A New Franchise Concept

Logic may suggest that a well-established franchise with many locations would be the safest choice but brand name and number of locations doesn’t always guarantee success.

What are the Pros and Cons for you to consider when buying into a new franchise concept?

PROS:

  • Franchisees getting in on the ground floor of a successful new franchise concept have the opportunity to build a business empire and the potential to make a lot of money.
  • The availability of prime locations and areas will be of benefit to the first franchisees.
  • Franchisors may be more flexible with their terms and conditions to encourage prospective franchisees to buy into the new franchise concept.

CONS:

  • A new franchise concept involves more risk as it has no franchise history of proven profitability which makes it more difficult to obtain funding.
  • There may be little or no brand awareness of the new franchise concept which may take years to develop to create a competitive edge.
  • As a franchisee of a new franchise concept, you may be a guinea pig in so far as learning how a franchise system works from a franchisor who is only now learning themselves.

However, by disqualifying a new franchise concept because it is new might cause you to miss out on your opportunity for success.

So, what’s the best choice for you – to buy into a new franchise concept or to go with an established brand?

 

kevKevin Antonie

CEO

SA Franchise Brands

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