Should You Start a New Franchise or Buy an Existing One?

Launching a business through franchising has never been more popular in the UK. Some entrepreneurs are choosing to open a new franchise, while others are taking advantage of rising franchise resale opportunities, where an existing unit is put on the market by its current owner. Both routes can lead to strong long-term performance, but the right choice depends on your budget, experience, risk appetite and expectations for growth.

New franchise vs franchise resale: advantages and challenges

Choosing between launching a new franchise and deciding to buy a franchise resale means weighing two very different business journeys. Both can lead to strong results, but each option comes with its own set of advantages and operational realities.

Advantages of starting a new franchise

A new unit offers a clean slate. You set up the site, recruit the team, establish local marketing and build the customer base from scratch. This appeals to entrepreneurs who enjoy shaping operations and embedding the brand’s systems exactly as intended from day one. In many cases, the initial investment can also be lower than purchasing an established franchise business for sale, especially when the franchisor offers entry-level packages or flexible launch formats.

New units also give you access to the latest brand developments. Whether that’s updated store design, digital systems or improved operational processes, you begin with the most current version of the model rather than inheriting older infrastructure.

Challenges of starting a new franchise

The main disadvantage is the time needed to reach break-even. With no existing clients or cashflow, performance relies heavily on local demand and your ability to drive early visibility. There is also more operational pressure during the first months: recruitment, training, community marketing and day-to-day setup require sustained effort. For some buyers, this adds risk compared with acquiring an operating, revenue-generating site.

Advantages of buying a franchise resale

Purchasing a franchise resale means taking over an existing unit, often with established customers, trained staff and predictable revenue. This significantly reduces the “build-up period”, making it ideal for buyers who want income sooner or prefer a tested location instead of starting from zero. You also gain historical financial data, making it easier to assess turnover, profit margins and potential growth before you commit.

Another benefit is inheriting operational maturity. Many resales have strong community presence, long-term customers and reliable local suppliers. As Cavavin highlights, “A resale allows you to benefit from everything that has already been built,” giving buyers immediate stability and a clearer forecast of future performance.

For a deeper breakdown of what to expect, you can explore our guide on the pros and cons of buying an existing franchise.

Challenges of buying a franchise resale

The main challenge is cost. Established units often command higher prices, especially those with strong profits. Buyers must still conduct thorough due diligence to understand why the franchise is for sale, analyse past performance and review the condition of equipment, leases and local agreements.

There is also the transition factor. Even strong businesses can lose momentum if handover processes or staff retention aren’t properly managed. Finally, franchisors must approve all transfers, and some may require additional training or investment before the sale can proceed.

What kind of buyer are you?

Once you understand the difference between starting a new unit and choosing to buy an existing franchise, the next step is assessing which route fits your profile, budget and expectations.

When a new franchise is the best fit

A new franchise suits buyers who value freedom and early-stage creation.

It’s ideal for:

• First-time business owners with lower capital, especially when the brand offers entry-level launch packages or mobile formats.
• Entrepreneurs who enjoy building something from scratch, from hiring the first team to shaping customer experience and establishing community presence.
• People wanting maximum freedom to shape operations within the franchisor’s framework. A new unit lets you apply the model exactly as designed, without inheriting legacy systems, habits or staff structures.

When a franchise resale is the better choice

A franchise resale, often listed as a franchise for sale UK or franchise business for sale, suits buyers who prioritise stability and speed.

It’s best for:

• Buyers who need income quickly, as many resales already generate steady turnover at the point of transfer.
• More risk-averse profiles who want to minimise the uncertainties that come with launching a brand-new site.
• Career-changers with savings who want a smoother transition into business ownership with proven demand and an existing customer base.

Investors seeking performance rather than trial-and-error, where the ability to forecast revenue and manage a mature operation is more important than building from the ground up.

Due diligence essentials before making your choice

Whether you open a new franchise or decide to buy a franchise resale, thorough due diligence is non-negotiable. For resales in particular, review at least three years of financial statements, customer data, staffing structure and the condition of assets or equipment. Assess how to value a franchise properly by comparing profit trends, local competition and any upcoming lease or refurbishment obligations.

You should also understand the full franchise resale process: required training, transfer fees, timelines and the level of franchisor approval needed before completion. For new units, review territory potential, launch costs and working capital requirements to ensure the business can sustain its first trading months.

Two Different Routes to the Same Goal

Starting a franchise from scratch and franchise resales are both strong paths to becoming a successful franchisee. Your choice depends on your resources, your appetite for risk and the pace at which you want the business to grow.

Acquisition offers speed, stability and instant market presence. Starting fresh offers control, creative input and the satisfaction of building a business your way.

Whichever option you choose, thorough research and due diligence will ensure you begin your franchising journey with confidence.

FAQs

What is a franchise resale, and how is it different from buying a new franchise?

A franchise resale is the purchase of an existing franchised business rather than starting a new location from scratch. Unlike a new franchise, a resale already has customers, trading history, staff and an established presence in its territory, which can reduce early risk and speed up profitability.

Is buying a franchise resale less risky than starting new?

Often, yes. You take over a proven location with existing customers, but you still need to review financials and understand why the business is being sold.

Why would a franchisee want to sell their business if it is successful?

There are many reasons, most unrelated to performance. Common motives include retirement, relocation, career change, or wanting to release capital. A resale does not automatically mean the business is failing, which is why reviewing financial records and speaking with the franchisor is important.

Can I get financing to buy a franchise resale?

Most UK banks finance resales, and many prefer them because they can assess real trading data. You’ll need accounts, a business plan and franchisor approval.

Do I need franchisor approval for the resale to go ahead?

Yes. Franchise agreements are personal to the franchisee, so the franchisor must approve the new buyer. They assess whether you meet the network’s standards, financial requirements and training expectations. Without franchisor approval, the sale cannot go ahead.

How do I value a franchise before buying?

Assessing the value of a franchise resale involves both financial analysis and market comparison. Start by reviewing the franchise’s key financial indicators, such as net profit, turnover trends, cash flow, and operating costs, to understand its actual performance. Examine the condition of assets (equipment, premises, stock) and identify any upcoming expenses or renewal fees that could affect profitability.

Next, compare the asking price with similar franchise resales in the same sector and region. This benchmarking helps you gauge whether the valuation aligns with current market conditions. Don’t overlook intangible assets such as brand reputation, customer loyalty, and the strength of the local market position. These often add significant value to a franchise resale.

It’s advisable to seek independent advice from an accountant or franchise specialist who can review the accounts, highlight potential risks, and confirm whether the franchise’s future earnings potential justifies the price. For more detailed guidance, see our article on how to value a successful franchise.