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Should You Buy a New or Existing Franchise?


Buying a new or existing franchiseA franchise can be a great introduction to small business ownership, allowing you to leverage the established brand of an already successful business. But how do you decide whether to buy a new franchise (what is known as a Greenfield in the Kwik Kopy system) or buy into an existing one? There are a unique set of opportunities and challenges to both options.

Advantages of a New Franchise

While every business opportunity – franchise or not – is different, starting a new franchise provides some significant advantages that you miss out on if you buy into an existing franchise.

  1. It’s a Fresh Start – A new franchise offers you a clean slate. When you are starting fresh, your success is never dependent on the shortcomings of a previous owner. Although you will initially have to work harder to establish your business within the community, you won’t have to ‘win over’ any customers who have been negatively effected by the business in the past.
  2. Startup is Cheaper – Starting a new franchise is often less expensive because you aren’t buying an established customer base with all the benefits that provides (ie: existing cashflow).
  3. Newer Facilities and Machinery – If you are opening a new franchise you are more likely to have access to new and modern equipment. Outdated equipment can be less reliable, and if your industry is particularly competitive and prone to technological advances, the quality of your machinery can have a significant impact on your success.
  4. You Get the Glory – When your new franchise is successful you will have the pleasure of knowing that it was all because of your hard work and efforts, rather than a side effect of buying into a solid reputation and strong customer following thanks to the previous owners efforts.

Advantages of an Existing Franchise

In general, existing franchises with a proven track record are seen to be a safer investment and here’s why.

  1. Proven Track Record – When you buy into an existing franchise the business is already fully functional so there will be a proven track record of profitability and you will be able to make reasonable profit and cash flow projections of what to expect in the short term of the business.
  2. Established Customer Base – A loyal customer base is a huge advantage for any new business owner. And one of the biggest advantages of a franchise acquisition is that you are buying into an established brand, and most customers will remain loyal, even after a change of ownership.


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