National Brokers Network

How Buying a Business Franchise Can Work and Not Work For You

Making a decision to own a franchise can be a big change in your life as a businessman in many ways. In every decision, there will always be the pros and the cons and franchising is not an exception.

Franchise buying can be a quick way to start a business without starting from scratch. Of course, there are rewards and drawbacks, so here is a list to help you know what are the pros and cons of this big decision.



1. Franchising can help reduce the risk of business failure. In buying a franchise, you actually bought a proven or existing idea and helped to spread it. The good side of this is before you commit yourself to a certain franchise, you can check how successful it is and compare to other franchises as well.

2. Since the franchise bought already has a proven and existing name, you will already have a recognised brand name and trademark. You will also benefit from the franchisor’s advertisements.

3. Products, services, and systems are already established, therefore no more market testing required.

4. The franchisor will give you support which includes training, help setting up the business, a manual for instructions and ongoing advice. In regards to training, this also includes training to ensure to establish skills to operate the franchise. So do not worry if you do not prior experience.

5. The support of the franchisor and other franchisees can help you compete with big businesses more than independent businesses.

6. The first franchisee gets exclusive rights in the territory, which means the franchisor will not be selling the franchise to the same territory.

7. Financing can be easier since banks tend to lend money to people who want to buy a franchise with a good reputation.

8. Relationships with suppliers are already established and strong.


1. Accumulated cost may be higher once computed together, which are the initial costs of buying the franchise, continuing management service fees and products bought from the franchisor.

2. The franchise agreement frequently includes restrictions on how you can run the business. You may not be able to change or tweak the business to be in-sync with or respond to the local market and grow. If ever you want to sell the franchise, it can only be sold to someone approved by the franchisor.

3. Ongoing franchisor monitoring may become intrusive to you.

4. The franchisor may go out of business or bankrupt.

5. Your franchise may get affected if other franchisees create a bad reputation, therefore the recruitment process is thorough.

6. As a franchisee, you are required to pay the franchisor a percentage of gross sales each and every month of your franchise existence. Percentages may vary depending on the franchise agreement.

After laying out the pros and cons, business brokers victoria should be wary and thorough in dissecting through this information and know if the franchise chosen is worth it to buy or not.


Confidentiality Agreement

In Consideration of the Vendor of the subject business, or any other business introduced to the Proposed Purchaser and their agent National Brokers Network (“the agent”) providing information to the Prospective Purchaser, the Prospective Purchaser agrees:

1. To keep all information provided confidential in respect to the subject business and any other business introduced to the Prospective Purchaser by the Agent.
2. That no information is to be disclosed by the Prospective Purchaser to any third party without consent by the Agent;
3. That it will not use for themselves. Or for others benefit, such information other than to Purchase the subject business or other business introduced by the Agent;
4. That any agreement to purchase the whole or portion of the business shall be exclusively through the Agent;
5. To immediately return to the Agent all such information and other details in written form including any drawings and any copies made of written information, notes, summaries or extracts of any document therefor if any when requested by the Agent;
6. Under no circumstances will the Prospective Purchaser make direct contact with the vendor of the subject business or other introduced business without the prior written consent of the Agent;
7. If the Prospective Purchaser breaches this agreement or buys the business direct from the Vendor, the Prospective purchaser is liable to and indemnifies the Agent for any and all losses the agent may incur including economic loss and loss of income.v

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