Franchises Are Preferred Over Purchases of Existing Businesses
By: Michael Alston for Franchise Insights
April 26, 2022 – In a recent survey of aspiring business owners, 18.4% indicated a preference for the option to “buy a franchise” over buying an existing business. While 39.5% indicated interest in the franchise purchase option, only 21.1% indicated an interest in buying an existing business.
While reasons for the preferences were not collected in the survey, the benefits of a network of successful franchise owners and recognized brands are well-documented, with more than 780,000 franchise units in the US. Startups of entirely new businesses are more likely to fail, and purchases of existing businesses can require much more capital up front with many of the same risks and no network of training and support often available to franchisees.
Looking at this data over time, one can see the preference for franchise ownership over an existing business purchase increased during the pandemic. From an average of 10.0% in 2020, the preference increased to 14.6% in 2021 and 14.2% in 2022. One can speculate that the uncertainty and desire for flexible work and self-determination brought about by the pandemic, while spurring entrepreneurs to consider business ownership, also pushed those inclined to look at the relatively lower-risk purchase of a franchise.
This survey of aspiring business owners was conducted March 23-30 for the most recent Small Business Startup Sentiment Index™, which is conducted monthly by Franchise Insights on persons inquiring across the FranchiseVentures lead generation platform.
FranchiseVentures is the leading franchise lead-generation platform for potential franchisees to thousands of growing franchise systems in the United States and Canada. Its franchise lead generation brands include Franchise.com, Franchise Solutions, Franchise Gator, Franchise Opportunities, Franchise For Sale, SmallBusinessStartup.com and BusinessBroker.net, and together they provide the largest aggregation of prospective franchise buyers in the U.S.
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Published on Wednesday, April 26th, 2023.