The Pros & Cons of Elderly Care Franchises Available for Resale
If you’re looking to purchase an elderly care franchise right now, you’re faced with a tightening market. With major brands like Visiting Angels®, there are fewer and fewer new territories for elderly care franchises available. As a result, many buyers feel like they need to choose between the territory they want to work in and the brand they want to work with.
One way to get around this problem is to look for elderly care franchises available for resale. Purchasing a resale franchise can give you the kind of territory you’re looking for, and with a brand you feel confident joining.
In fact, many buyers prefer to target resale franchises in the first place. After all, why start a franchise business from the ground up when you can purchase an already developed and successful business?
As with any major purchase, there are upsides and downsides to purchasing a resale elderly care franchise. If you’re thinking about buying an existing franchise, here are three pros and three cons to consider.
The Pros of Elderly Care Franchises Available for Resale
Existing Cash Flow & Assets
When you buy an existing franchise, you don’t need to spend 2-3 years building your business. Instead, you’re purchasing an already up-and-running business. This means you’ll have a head-start in a number of key areas, including:
- Cash flow
- Office infrastructure
- Market data
If you purchased a new franchise, you’d need to acquire or develop all of these yourself. With a resale franchise, you can skip the grind that most new franchisees face in their first few years. And if you’ve purchased a successful franchise, you’ll already have a proven business model in place.
Access to Lucrative Markets
Senior care has been one of the fastest-growing franchise sectors over the last 10 years. Because of this, there are limited elderly care franchises available. Successful brands, like Visiting Angels, have already sold most of their territories. Meanwhile, newer brands face stiff competition from established providers.
This makes it tough to find new elderly care franchises available in most markets. A resale franchise can give you a protected territory in your region with an established brand.
Chance of Bargain Franchise
Most franchise resale buyers prefer to buy a thriving franchise. But some prefer to look for struggling franchises with hidden potential. This way, they can buy a franchise and its existing infrastructure at a bargain. After that, they revamp the franchise to make it more profitable.
For example, if you can find a franchise that uses outdated systems or practices, modernization could make it more viable. Alternatively, you might find a franchise that can be restructured to better serve its local market. Or you might simply find a franchise that needs nothing more than a change of management styles. While this is a riskier choice than buying a healthy business, the rewards can be significant.
The Cons of Elderly Care Franchises Available for Resale
Higher Costs on Average
Purchasing an existing business costs typically more than starting a new one. Resale franchises typically go for 30% above the cost of a new franchise. The healthier the business, the higher that number climbs.
That said, there’s a reason people pay more for resale franchises. Many buyers are more than happy to pay a higher price tag if it means a greater chance of profitability on a shorter timeline.
Potential for Hidden Risks
If you’re looking at elderly care franchises available for resale, the owners should provide you with detailed data on their finances and performance. However, this data may not contain hidden risk factors. Changing demographics, new competition, and owner-reliant business models can undermine the future profits of a resale franchise.
Before buying a resale franchise, make sure that you perform a detailed evaluation of the local market and how the franchise operates. Keep an eye out for potential vulnerabilities and weaknesses. If you spot any, explore whether they can be easily and cost-effectively addressed.
With some franchisors, there’s a lot of freedom in how you build, structure, and run your business. But if you purchase an existing franchise, this flexibility could be limited.
Once again this is an area where many buyers prefer to target elderly care franchises available for resale. While some business owners enjoy a blank canvas, others much prefer an existing framework. That framework may limit your options. But it will give you a solid structure to modify as you see fit.
Looking for elderly care franchises available for resale in your area? Call 800-365-4189 or contact us online to learn about resale opportunities with Visiting Angels.