when you buy a franchise from some one who is selling it are you typically going to make a profit?

Question

selling it out of the paper? will you make a proffit when you buy it seeing as how you bought it from someone or are you going to sink?

Answer 1

Profits are never guaranteed in any business transaction.

As the saying goes: "You pay your money, you take your chance."

Answer 2

Assuming you start off with a sound business with a decent location or whatever other variable affects businesses of the type, whether or not you make a profit is largely up to you: How much effort you put into it, hours, advertising, promotion, etc.

I think your basic question refers to whether or not the business is even worth considering? That depends on several things, all related to the "Due Diligence" research process.

You need to first investigate the franchise opportunity itself for stability and track record. This may be quite easy if the brand in question is a "household name" such as one of the bigger chains. Next you will need to see the books, compare the claims of the owner to the books, audit payroll, banking, and inventory records for as many periods as you need to feel comfortable, run marketing projections, etc...

If you are not experienced in reading financial statements and doing this diligence research I strongly advise you to hire a CPA or business aquisition specialist to assist you.

Answer 3

That depends on many things. First, does the business have a rock-solid, proven operational system? Second, does location matter, and if so, do you have the proper location (especially if it is retail)? Third, are you going to be able/willing to operate it?

Running a successful business takes a lot of work, and money. Do your best to stay out of debt, and you'll be ahead of most.