Seeking Advice - Considering Multi-Unit Franchise Acquistion

searcher profile

September 19, 2024

by a searcher from Washington State University in Vancouver, WA, USA

I’m currently evaluating the potential acquisition of a multi-unit franchise.

I’m relatively new to franchise acquisitions. I have some questions that I'm hoping others who have had success acquiring franchises (franchise resales specifically) might be able to answer.

What are some key factors I should focus on during the due diligence phase for a franchise acquisition?

Are there any common red flags you've encountered when evaluating franchise businesses?

What are the biggest risks you've faced when acquiring a franchise?

Based on my limited research, it appears that seller financing seems to be less desirable in the franchise resale market. Is this common?

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commentor profile
Reply by a searcher
from Rutgers in Philadelphia, PA, USA
The only real franchise-specific diligence items would be speaking with other franchise owners (not the ones the franchisor refers you to) and, if it's a service business, understanding the territories of the other owners in your area so you can plan expansion or acquisition options in the future. Managing multiple franchise units across disjointed areas can be a pain and require more office overhead than contiguous territories that can more easily share resources. Make sure you understand what your financial goals are for the acquisition and what your expansion options are to hit them.
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
I would be happy to have a discussion from a financing perspective and go over options and items to watch out for. You can reach me here or directly at redacted
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