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To Buy or Not to Buy?


Buying a franchise will probably be your largest purchase behind the family home. It is therefore imperative that you take a logical approach to your decision making process. The following reasons will help assist you in the decision process.

Reasons to buy a Franchise

1. Less chance of failure. The survival rate for franchises is around 77%, against a significantly lower 33% for small businesses.

2. You are buying a developed business idea with proven delivery systems and support behind it.

3. You don’t necessarily need specific industry knowledge.

4. You don’t need extensive business experience as you have access to training, advice, assistance, marketing and advertising.

5. Savings from the Franchisor’s centralised bulk purchasing of product, equipment, supplies, advertising.

6. You are operating a tried and tested brand with a proven market position.

7. Financial institutions are more willing to back a proven and successful business model and you may be able to access vendor financing.

8. Access to the franchisors experience and professional services which will lower the start up costs compared to a new business

9. The franchisee has access the franchisors intellectual property for example recognised trade marks, patents and trade secrets.

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Reasons not to buy a Franchise

1. It could be more expensive to set up than your own independent business.

2. Contractual issues need to be carefully considered.

3. Competitive restrictions on price, type of product sold or service offered and the area in which you can operate.

4. A franchise gives you less independence than your own business model.

5. Other Franchisees may weaken the brand name and consequently they can unfavourably affect your business by association.

6. The franchisor will normally restrict or place conditions on your ability to on sell the franchise system.

7. Ongoing royalty payments.

8. When you purchase a franchise it is only for a fixed period of time therefore you may be asked to pay expensive renewal fees.

9. The franchisor may be unable to maintain the level of service or cooperation if other franchisees have financial difficulties.

10. The good name and goodwill of the franchise may be lost for reasons beyond your control.

11. There is a risk your Franchisor might fail.

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 If you’d like more information or if you would like to discuss whether buying a franchising suits you. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.