Buying an existing business vs. Investing in a franchise in the USA

If you’re considering investing in a business in the United States, you’ve likely been faced with the decision of whether to acquire a franchise or buy an existing business. Both have their advantages and disadvantages. Something you should keep in mind and that we usually repeat in all our communication channels is that the best option for you will depend on your personal goals and preferences.

In this blog, we’ll explore in detail the differences between acquiring a franchise and buying an existing business in the United States. We’ll talk about the costs, business model, flexibility, support, and risk associated with each option. We’ll provide you with valuable information and helpful tips to help you make an informed decision about acquiring a business in the United States.

Franchising in the United States

Franchising in the United States can be an excellent investment opportunity for entrepreneurs interested in expanding into the U.S. market.

This proven business model can help investors minimize the risks associated with starting a company from scratch or buying an existing business in the United States. In addition, by investing in a franchise, entrepreneurs also have access to a support network that provides assistance in key areas such as marketing, finance, and operations.

There are a wide variety of franchises available in the United States, ranging from restaurants and retail stores to pet sitting services and cleaning services, among several others. It is essential to carefully research the available options and select a franchise that suits your interests and skills.

When choosing a franchise in the United States, it is also important to consider the investment costs and royalties associated with the franchise. Some franchises may have higher upfront investment costs, but they can also provide greater long-term earning potential.

Franchising can be a great option for minimizing risks and maximizing revenue potential. By carefully selecting a franchise that suits your interests and skills, you can be well on your way to succeeding in the U.S. market.

Main advantages you will have when acquiring a franchise

• Already established business model: When you acquire a franchise in the U.S. In the US, you will get an already established business model that has been tested and improved in the market. This helps reduce the risk associated with creating a new business from scratch or buying an existing business.

• Support and training: Good franchises often offer support and training to their franchisees to help them run the business effectively. This can include training in marketing, sales, operations, and finance, which can help the franchisee succeed in their new business. In addition, some franchises in the United States usually provide sales coaches to help them achieve their goals.

• Branding and recognition: When you acquire a franchise in the U.S. In the U.S., you will obtain the rights to a brand recognized in the market. This can help attract customers and increase the chances of business success.
  
• Access to Providers and Resources: Franchises may have agreements with established suppliers, which helps franchisees get discounts and better purchase terms compared to what they might get as an independent business or existing non-franchised businesses.

• Marketing and advertising plans: Franchises often have marketing and advertising plans in place that help promote the brand and attract new customers. This can save the franchisee time and money compared to creating a marketing plan from scratch.

Investment amounts to acquire a franchise in the U.S. USA

If you want to acquire a franchise in the United States, it is important to understand the costs associated with this investment. The cost of acquiring a franchise varies depending on factors such as the type of franchise, brand, size of the business, and geographic location.

Here you have to differentiate between foreign investors and American/foreign investors who are already settled in the United States. In general, the cost can range from a few thousand dollars to several millions. For investors who are in the country, the investment can be around $30,000 USD and up, however, for foreign investors when requiring an investment visa, they will need to have capital between $120,000 and $150,000 USD in a business that generates jobs.

Contact us today to learn more about our franchise options in the United States and find out how we can help you achieve your investment goals.

If you are looking to acquire franchises in the United States, it is important to follow these steps:

1. Research the different U.S. franchise options available, as there are many franchise options on the market, each with different business models and financial requirements. Carefully research all available options before making a decision.
   
2. Assess your skills and goals: Before purchasing a franchise, it is important to evaluate your business skills and goals, as well as your personal and financial goals.
   
3. Research the brand and its reputation: It is essential to research the brand and its reputation before acquiring a franchise in the USA. You can consult the opinions of other franchisees, research the history and trajectory of the brand and its business model.
   
4. Analyze financial costs and requirements: Each franchise has different costs and financial requirements to acquire and operate the business. It’s important to carefully analyze these costs and requirements to make sure you’re making the best decision for your investment.
   
5. Get advice from experts: Having a team of professional advisors in the area of franchise buying, such as lawyers, accountants, and business consultants, can help you evaluate your options and offer valuable recommendations and guidance to make an informed and responsible decision.

Let’s evaluate together which franchise in the United States is right for you. Schedule a consultation with our team today!

Existing businesses in the United States

Buying an existing business in the United States can be an excellent option for entrepreneurs looking to enter the U.S. market quickly. By buying an existing business, you’ll acquire a company with an existing customer base, established relationships with suppliers, and experienced employees.

Before buying an existing business in the United States, it is crucial to carefully research the company and assess its potential for growth and profitability. Entrepreneurs should analyze the company’s financial statements, operating structure, and market position to determine if it is a good investment.

One of the advantages of buying an existing business is that entrepreneurs can leverage the experience of the previous owner to help guide the business in the long run. Previous owners can offer valuable insights into business operations, the market, and the competition.

Buying an existing business in the USA can be an excellent option for entrepreneurs looking to have a business/venture that they can manage freely.

It is key to highlight that unlike buying a franchise in the United States, since you must be cautious because you will not have a proven business model, you will not get support in the operation 24/7, as well as constant training or help from other franchisees who are or have already gone through “x” situation that you may be going through.

The importance of FDD: We mention these points because we always tell our clients that if they come from abroad and do not yet know the North American market well, they should opt for a “safer” investment such as franchises, since you have a Franchise Disclosure Document (FDD).

With this document, as a buyer you will be able to access the breakdown of the investment, you will see profit margins, costs, among other topics, allowing you to obtain information before acquiring the franchise and ensure that you are investing capital in a safer place.

With this, we want to mention that buying an existing business in the United States is not a good option, but we have seen several frauds, since usually business owners can lie about their financial figures and problems they have with the business and this can have consequences for you. For this reason, we recommend that you invest in a franchise, as they are audited by the FTC and once they know the market, diversify their investments and invest in an existing business model, or start one from scratch.

What you should consider for the purchase of an existing business in the United States:

• Research: Before acquiring an existing business, it is essential to thoroughly research the market and sector you would like to enter, as well as thoroughly research the business in question, including its financial history, strengths, weaknesses, and position in the market.

• Financial Evaluation: Once you’ve identified a business you’re interested in, you should carefully evaluate its financial situation to determine if it’s viable and if it’s a good investment. This includes reviewing the business’s financials, including its cash flow, balance sheet, and income statements.

• Price negotiation: Once you’ve carefully evaluated the business, it’s important to negotiate a fair price. This can be a complex process and requires a detailed understanding of the financial situation of the business and its market value.
  
• Due diligence: Before closing a deal, it’s crucial to conduct thorough due diligence to ensure there are no hidden issues with the business. This may include checking contracts, financial records, and applicable government regulations.

• Legal and accounting advice: Legal and accounting advice is valuable when acquiring an existing business. An attorney can help you protect your interests and navigate the legal process, while an accountant can help you assess the financial situation of the business and make sure you’re making a sensible investment.

5 Differences Between Buying a Franchise or an Existing Business:

1. Business model: When you buy a franchise in the USA, you are acquiring an already established and proven business model. On the other hand, when you buy an existing business, you may be acquiring a business model that may be novel and unproven.
   
2. Support: Normally, a good franchise in the United States will provide you with great support, including training, advertising, and day-to-day assistance. When buying an existing business, you may have to solve problems on your own.
   
3. Costs: Buying a franchise in the United States is generally more expensive than buying an existing business due to franchise rights and startup costs. On the other hand, an existing business may require more investments to improve and modernize infrastructure and processes.
   
4. Flexibility: With a franchise, there are rules and regulations that you must follow, which can limit your ability to customize the business. By buying an existing business, you’ll be free to make changes and improve the business model.
   
5. Risk: Buying a franchise can be less risky than buying an existing business, as the business model has been proven and has a demonstrable track record of success. However, buying an existing business can be riskier because you have no guarantees that the business model will be successful.

Final Words for the Investor

Buying an existing business or acquiring a franchise can be a great way to enter the United States and the business world with a solid initial investment.

When buying an existing business, you can take advantage of the infrastructure you already have, such as relationships with customers, suppliers, as well as the team and brand already established. On the other hand, acquiring a franchise offers the opportunity to own a business backed by a well-known brand in the North American market and with an already established business model.

However, it is important to note that both the purchase of an existing business and the acquisition of a franchise are not decisions that should be taken lightly. It is essential to carefully research the available options and get advice, to ensure that the best decision is being made for the future of the business and investment.

In both cases, we recommend that you have a team of professional business buying advisors, such as lawyers, accountants, and business consultants. These experts can help evaluate options, offer valuable recommendations and guidance to make an informed and responsible decision.

Do you want to be part of a recognized and successful brand? Contact us today to learn about our franchise options in the United States and start building your own business empire.