If you do visit a franchise convention and identify something of interest, remember the golden rule: Do not sign anything until your lawyer has had a chance to review it unless you have thoroughly read and truly understood every word and sentence on the page, front and back. Do not accept the argument or statement from the franchisor’s representative that this is just a “standard” form and really means nothing. If it truly means nothing why do you have to sign it in the first place? The fact that it is a “standard” form scares me to death, a credit application is also a “standard” form.
There are also numerous franchise magazines and directories that are published monthly and quarterly which can be purchased at most book stores. These publications list available franchises, their costs and other relevant criteria that will allow you to do comparisons.
Franchises can also be identified on the internet. There are numerous franchise listing sites on the web and a few hours spent searching these sites will give you many opportunities to consider.
If you have the financial where with all and are so inclined you can always consider and investigate the major, well-known franchises. Contact information for these franchises can be obtained from any current franchise location or through the internet.
Associations:
Talking to the President’s of trade associations is an avenue that many potential business buyers overlook. If there is a specific type of business that you are interested in, identify the local trade association. As an example you would like to acquire a plumbing contractor. I can almost guarantee that there will be an association for plumbing contractors in the geographic area that you looking within to acquire a company. Talk to the President of the association, he may very well know of someone who is considering selling, looking for a partner and/or investor for their current business. Associations generally publish monthly or quarterly newsletters and some will allow advertisements from non-members. Utilization of this media to place a classified ad expressing interest in acquiring, becoming a partner in or investing in may yield extremely positive results.
As an example, if you were considering acquiring a Boarding Kennel the ABKA (American Boarding Kennels Association) offers a seminar and other information on the industry on their web site.
Board of Trade:
If there is a specific geographic area that is of interest to you, make contact with the appropriate Board of Trade or Commerce association for that area. They are generally a wealth of information not only on businesses that may be available for purchase, but they will be able to advise you on changes and expected changes in demographics, new highways, medians, overpasses and county and city bylaws.
Internet:
The latest and greatest way to find anything is an internet search. You will be able to spend hours if not days searching through listings of business for sale and individuals looking for partners and months looking at individuals and businesses that require or desire investment.
Friends & Relatives:
When looking for a business it is important to network with everyone that you know. You might be surprised at the number of times that I have had clients tell me that when they had announced to their friends and relatives that they had acquired a business they received a response of “I wish I had known you were looking to buy a business, because my friend’s father’s brother wants to sell his”, (or something similar). I cannot think of any valid reason why an individual would want to hide the fact that they are looking at acquiring, becoming a partner in or investing in a business.
Business Brokers:
Business Brokers work in a similar manner to real estate agents. They find someone or a company that wants to sell their business and they proceed to try to locate a buyer. Most Business Brokers will also accept assignments from individuals or corporations who wish to acquire a business and try to find them that a business that is for sale that meets their criteria.
A Business Broker may be a one-man organization or part of a much larger enterprise. It is important to remember that a Business Broker works for his own account in the same manner as a real estate agent. As a general statement they have very little in depth knowledge about any business that they are offering or have listed for sale. They want to earn a commission, usually 10% to 15% depending on the total value of the transaction, by consummating the transaction as quickly and efficiently as possible. The first thing they will tell you is that they would never show you a business that they did not believe in and that could not be financed (if you believe this I have a bridge in Brooklyn and some land in Florida that I would love to talk to you about buying). Make sure you can afford what you are buying. Just because a Business Broker has lined up financing does not mean that the business can truly afford the interest and principal payments associated with that financing. Always remember that although it is the seller who actually pays the commission to the Business Broker (in 99.9% of all successful transactions), it is the buyer who in reality is paying, as the selling price was set with the Business Broker’s commission in mind.