Franchises Are Preferred Over Startups or Purchases of Existing Businesses
By: Michael Alston for Franchise Insights
October 18, 2023 – In a September 2023 survey, aspiring business owners preferred the option to “buy a franchise” over buying an existing business by more than a two-to-one margin. While 65.5% indicated interest in the franchise purchase option, only 29.8% indicated an interest in buying an existing business for sale.
Starting up a non-franchise business was chosen second most often as an option, by 58.3% of respondents. The totals add up to more than 100% since survey participants could choose more than one option.
While reasons for the preferences were not collected in the survey, the benefits and support of a network of successful franchise owners and recognized brands are well-documented, with more than 792,000 franchise units in the US. Startups of entirely new businesses fail for a myriad of reasons – poor business plan or product, insufficient capital, or failures in execution. Purchases of existing businesses can require much more capital up front with many of the same risks and no network of training and support typically available to franchisees.
Access to funding remains a primary concern of aspiring business owners, especially as credit tightens and interest rates rise. More entrepreneurs plan to use personal financial resources than a year ago, perhaps related to the cost and availability of loans.
This survey of aspiring business owners was conducted in September 2023 for the most recent Small Business Startup Sentiment Index™, which is conducted monthly by FranchiseInsights.com 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, October 18th, 2023.