And it may substantially reduce profits.Being under a franchise will substantially reduce those risks, however, you will need to understand what you are buying into and the contractual arrangements that you will be forced to comply with.
As they get paid first, and basically you work for them .
I agree that franchises can be a safer option, but if you are buying an existing business, with a proven track record of turnover and profits for a number of years, then there is a good deal of safety in this.
This is easy to say, but in reality it's not that simple or easy.Any potential buyer needs ensure that they have undertaken their business plans and know how much time and money they can devote to it.
No different to buying IP's.
chilliblue it's very different to buying an IP.
And it's very easy to fudge numbers on a P/L and balance sheet.
An experienced operator will look at the proposition as a whole and make sure everything "fits" in with everything else like a jigsaw puzzle.
Most people will fudge one piece, but wont make it fit with the others.
Passion? Unless you have a passion for managing & operating a business & dealing with people you'll fast realise life is very short.