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The Disadvantages of Buying an Existing AAA Franchise

Dec 27, 2017
Article #382
Author: Mel Jones

There are a few things I've learned in this business over the years and today I want to share one of them.  People have a belief that buying an existing AAA franchise such as McDonalds, Taco Bell, Jack-in-the-Box, etc. are great deals with low risk. On the surface, sure sounds like it. 

But in reality it is quite different. These triple A franchises are like fraternities, all the players know each other, they hang-out together and they keep every thing tight to their chest, including the sale of stores. 

When was the last time you saw an advertisement for the sale of a McDonalds?  Probably never. Ever wonder why?  Simple, they are kept in the family and the only ones ever making to open market are the loser stores. Otherwise other owners snap them up and pay a nice premium to get them 

So if you're buying a triple AAA franchise, be very careful because it means every franchisee has rejected to store for a reason.  Could be priced high, could be a bad location, could be a number of issues keeping existing franchisees away, and you ought to take heed of that fact. 

Now this isn't to say lesser franchises such as Subway, Baskin Robbins, Edible Arrangements, etc. aren't good investments, it is to say triple A franchises rarely come on the open market and when they do, be cautious. 

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