Franchise Resales: Buying an Existing Franchise vs. Starting New

When most people think about franchising, they picture opening a brand-new location from scratch—signing the lease, outfitting the space, hiring staff, and cutting the ribbon at a grand opening. But there's another, often overlooked path into franchise ownership: buying a resale franchise.

Franchise resales involve purchasing an existing unit from a current franchisee who is ready to move on. These opportunities are growing in popularity, especially as many longtime franchisees seek to retire, relocate, or shift career paths.

At The Great American Franchise Expo, we regularly meet aspiring business owners who are weighing the decision: Should I start a franchise from the ground up, or should I purchase a resale and take over something already in motion?

Both paths have their merits—and unique challenges. In this blog post, we’ll explore the ins and outs of franchise resales vs. starting new, equipping you with the insight to make the right choice for your goals, budget, and lifestyle.

What Is a Franchise Resale?

A franchise resale is the purchase of an existing, operating franchise unit from its current owner. Unlike a new franchise, which begins from zero, a resale typically includes:

• An established location
• Staff and operational systems
• A customer base
• Existing revenue and expense history
• Brand recognition in the local market

Resale listings can vary widely in size, value, and performance. Some are thriving and profitable; others may be underperforming or distressed—making due diligence essential.

What Does It Mean to Start a New Franchise?

Starting a new franchise means launching a unit in a territory where the brand is not currently operating. This involves:

• Site selection and build-out
• Hiring and training staff
• Marketing to attract initial customers
• Establishing processes and culture from day one

New franchises offer a “blank slate,” allowing the owner to shape the business from the ground up within the franchisor’s established guidelines.

Comparing the Two Paths

Let’s break down the key differences between franchise resales and starting new, highlighting the advantages and trade-offs of each approach.

1. Investment and Cash Flow

✅ Franchise Resale Advantages:

• Immediate Revenue Stream: A resale business is already generating income, which may reduce or eliminate the ramp-up period that comes with starting new.
• Established Cash Flow History: You can analyze real financial performance—not projections—to make informed decisions about ROI.
• Potential for Financing: Lenders may be more willing to finance a business with historical performance data and customer traction.

❌ Resale Considerations:

• The purchase price may be higher due to existing goodwill, equipment, and earnings.
• Hidden financial issues, such as declining sales or poor management, can pose risks.

✅ Starting New Advantages:

• Lower Entry Price: Startup costs may be lower upfront (excluding build-out) depending on the brand and location.
• Control Over Spending: You decide where to allocate funds, from marketing to hiring and design.

❌ New Franchise Considerations:

• Expect a longer period before turning a profit.
• You’ll likely need to invest heavily in marketing to build brand awareness in your area.

2. Brand Presence and Market Saturation

✅ Resale Advantages:

• Established Customer Base: An existing location has brand visibility and repeat customers.
• Local Market Insight: Performance history helps you understand demand, seasonality, and pricing strategies.

❌ Resale Considerations:

• The brand may already be saturated in the area, limiting growth potential.
• You may need to overcome legacy issues like poor reviews or previous management mistakes.

✅ Starting New Advantages:

• Territorial Control: You may be able to secure an exclusive, untapped territory with room for expansion.
• Fresh Reputation: You start with a clean slate—no past baggage or reputational challenges.

❌ New Franchise Considerations:

• You’ll need to work harder to establish your presence and customer loyalty from scratch.

3. Staff and Operations

✅ Resale Advantages:

• Trained Team in Place: You may inherit experienced employees who know the systems, culture, and customers.
• Operational Infrastructure: Existing equipment, POS systems, vendor relationships, and day-to-day routines are already running.

❌ Resale Considerations:

• The team may resist change or have loyalty to the previous owner.
• Legacy staffing issues or culture misalignment may require careful leadership.

✅ Starting New Advantages:

• Build Your Dream Team: You choose who to hire and set expectations from the beginning.
• Culture Control: You establish your leadership style, standards, and workplace environment from day one.

❌ New Franchise Considerations:

• Recruiting, training, and managing new staff takes time and effort.
• Mistakes early in the process can have lasting effects on culture and performance.

4. Risk and Predictability

✅ Resale Advantages:

• Reduced Uncertainty: Real-world financials give you insight into revenue trends, customer retention, and profitability.
• Track Record: You can assess risk based on actual performance, not projections or assumptions.

❌ Resale Considerations:

• Past performance doesn’t guarantee future success, especially if operations decline under new ownership.
• Hidden liabilities or operational issues may surface after the transition.

✅ Starting New Advantages:

• Controlled Variables: You design operations from scratch and learn everything firsthand.
• Growth Potential: You can grow beyond initial projections with a strong launch and execution.

❌ New Franchise Considerations:

• Higher risk during the launch phase.
• Greater uncertainty around timelines, customer response, and break-even points.

5. Lifestyle Fit and Personal Goals

✅ Resale Advantages:

• Immediate Involvement: You step into an operational business and start managing day one.
• Predictable Routines: The structure is already in place, which may appeal to those seeking stability.

❌ Resale Considerations:

• Less room for creativity or brand reinvention.
• More reactive problem-solving in the early stages of transition.

✅ Starting New Advantages:

• Entrepreneurial Fulfillment: Building from the ground up can be incredibly rewarding.
• Personalization: From team building to store design, you create something with your fingerprint on it.

❌ New Franchise Considerations:

• The startup process can be intense, especially for first-time business owners.
• Expect a steep learning curve and more hours in the early months.

How to Decide What’s Right for You

Now that you’ve seen the differences, how do you decide?

Ask yourself these key questions:

1. How comfortable am I with uncertainty and risk?

• If you prefer a proven operation, a resale may be better.
• If you enjoy building something from scratch, go new.

2. Do I want to manage or create?

• Resales require management skills to sustain and improve.
• Starting new leans heavily on creativity and vision.

3. How important is cash flow in the first 6–12 months?

• Resales may offer quicker profitability.
• New units often require more ramp-up time.

4. Do I want to build a team or inherit one?

• Starting new allows you to build culture from day one.
• Resales come with pre-existing dynamics and relationships.

5. What are my long-term goals?

• Resales may offer quicker returns or exits.
• New franchises may provide long-term satisfaction and growth.

Red Flags to Watch For in Franchise Resales

If you're considering a resale, look out for:

• Declining financials over multiple quarters
• High staff turnover or low morale
• Poor customer reviews or public reputation
• Outdated equipment or technology
• Seller reluctance to share full financials
• Unclear reasons for the sale

Always request the last 2–3 years of financial statements, speak with current employees if possible, and consult both a franchise attorney and accountant.

Where to Find Franchise Resale Opportunities

Franchise resales are listed on:

• Franchise resale marketplaces (e.g., Franchise Flippers, BizBuySell)
• Franchisor websites (many list internal resale opportunities)
• Franchise brokers and consultants
• Events like The Great American Franchise Expo, where franchisors and sellers connect directly with attendees

Attending a franchise expo can expose you to both resale and new unit options in one place, allowing you to compare models and meet representatives face-to-face.

Final Thoughts: There's No One-Size-Fits-All Answer

Whether you choose a franchise resale or start fresh, both paths can lead to rewarding business ownership. The best choice depends on your:

• Financial goals
• Risk tolerance
• Experience level
• Timeline
• Personality

At The Great American Franchise Expo, our mission is to give you the tools, knowledge, and connections to make the decision that's right for you. Our events feature dozens of franchisors, brokers, and consultants ready to help you explore both options—with no pressure, just clarity.

Ready to Explore Your Franchise Options?
Join us at an upcoming expo and learn about new and resale opportunities from top brands across the U.S.

🎟️ Reserve your free tickets now at franexpousa.com

Your next business chapter could be a phone call—or a handshake—away.