XP: WWYD: Re buying an existing business vs. a franchise?

vtgirl

Maybe I will get more answers from my parenting gals...

Ok, this may be long, but to try and be as quick as possible with giving you all the details- I have an opportunity to buy an existing business in my state. It is child related, thriving and has potential for growth.  After doing my homework, writing a business plan and securing a business loan- I found a national franchise that offers the same services that this business does.  The great draw (or so I thought) was to offer these services locally- but if I bought a franchise I could be doing it locally as well and have the support of a much larger company. I would have to pay yearly royalty fees (5%) so not too bad), and the start up costs are about the same as the business purchase price so $$ is not really a huge issue.  I am just torn about what to do. What if I buy the existing business and someone buys a franchise in state that is backed nationally- that could really hurt business. However, I love that the existing business was started in state, I wouldn't have to worry about franchise fees and I could grow it as I pleased.  WWYD? Any advice is welcome.  TIA!

YouAreMyILoveYou

DISCLAIMER: I have no idea what I am talking about. I have never owned a business.

I would imagine that being part of a franchise would leave me with the feeling that I still had a "boss." I think there are certain aspects that would have to remain consistant w/each franchised facility (like the general curriculum, hours, etc.) and I would much prefer to do my own thing and not have to report to a higher authority -- which is the ONLY reason I would even think about running my own business. I wouldn't want to feel like I was still working for someone else.

That's my $0.02!

Good luck with whichever you choose!

karen6784

As a co-owner of 2 businesses here is my take:

1.  Does the existing business have more of a potential to grow vs the franchise?  Does the franchise have brand awareness in your area? Or would you be building the brand from scratch?

2.  Does the franchise give you an exclusive territory?  I have been in the senario that the corporate office will decide to layer in another dealer on top of my existing territory.  Definately check out the fine print in this area.  What happens to you in the event that the parent company closes?  As a franchisee, do you have any say in marketing, hours or other areas.

3.  Are the royalties similar to other franchises that do the same thing as you?  DO you feel that your investment in the independent business would be threatened if the franchise would be in your backyard?

Sorry, more questions than answers.  I'll post more info. as I think of it.

addison_clark

My Dh and I own 7 franchised restaurants.  Although we pay a royalty fee we feel that what we get for that $$ is worth it!  We bought: a well-known "brand", with a proven successful product, marketing support, advertising support, fellow franchisee's to network with and share ideas, and an almost fail-proof system.  The franchise is invested in you too so they dont want you to fail and will send in help when needed.  Yes, they say what is on our menu and when to change prices and have other says, but we dont evre feel as though we are reporting to a boss.  I realize restaurants are different from childcare or thechild-related business you are talking about, just wanted to throw in our expereince.  Good luck!!!