Unlike starting a new business from scratch, when you buy a franchise, you are buying a proven system. Some systems like McDonald’s are more proven than others. That is why buying a franchise is less risky than starting a business from scratch. However, while you are buying a system, you do not have employees that know their job nor customers that know you exist yet.
While buying a franchise has what I would consider a medium level of risk, lenders are far more likely to provide debt financing based on the strength of the franchise.
When it comes to buying a franchise, I recommend finding and using a franchise broker. They cost you nothing and their services are paid by the franchisor only if they make a match. I like to think of the franchise broker as a real estate agent. They understand not only the industry, the location but also the process. And they are free.
That said, here is a link to the Franchise 500 ranking from Entrepreneur Magazine. Not only does the list rate each franchise but also gives you some idea of the initial investment required, liquid cash requirements, and ongoing franchise fees as well as many other facts. Be sure to look at the drop down box for other links such as best franchises for Veterans or Any Budget to discover franchise opportunities based on your budget.
Here are a few posts that provide information if you are considering buying a franchise.
