One week ago today, this blog ran Part I of a two-part, in-depth interview with Trump University Professor Richard Parker, developer of Trump University’s The Art of Buying a Business course.

 

In that interview, tackled many of the questions that need to be asked before buying a franchise. Today, Richard Parker talks more with Trump University’s Barry Lenson and brings the issue into even sharper focus.

 

Barry Lenson: If you own a business, you can deduct the costs of advertising, signage and other expenses. Is that also true with a franchise? Is there an advantage one way or another?

 

Richard Parker: The expenses can be deducted similarly. There are some tax advantages in both scenarios. Your decision has to be based upon what is best for you and your individual tax considerations.

 

BL: Which is easier to sell - an independent business or a franchise?

 

RP: A good non-franchised business is easier. Plus there are none of the franchise transfer fees that can be stipulated in a franchise agreement. Another problem, potentially even greater, is the fact that the master franchising company often has the right of first refusal on the sale and must approve any buyer. They may also want to implement an entirely new franchisee agreement with the buyer. In other words, you can find a willing buyer, only to have your franchise company block your sale.

 

Then there is the fact that the current market to sell solid, ongoing businesses is currently very strong, as we explore in my Trump University course, The Art of Buying a Business.

 

BL: So what do you tell the person who really wants to own a business and is leaning towards a franchise?

 

RP: Let me list the considerations.

First, take an honest inventory of yourself. What are your goals? Your strengths? Your weaknesses?

Second, decide if you can live with, and thrive within, the confines of a franchise.

Third, make certain to educate yourself about the specific franchise you are considering. The franchisors employ the slickest sales people you’ve ever seen. Be wary.

Fourth, if you’re absolutely convinced that a franchise is for you, buy a resale. One that’s already successful.

Fifth, if you have an ounce of doubt about buying a franchise, then it’s probably not for you. Take the time to research and investigate non-franchised businesses for sale. You really are better off, in my opinion, getting into a non-franchised business.

Sixth, and most importantly, whether a franchise or not, education is the key to your success. Take the time to learn what’s involved and know what you need to do in each stage of the buying process. Ultimately, your knowledge will determine whether you succeed or fail.

 

Trump University Professor Richard Parker developed Trump University’s self-paced multimedia home-study course, The Art of Buying a Business.