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Choosing between buying an existing business or launching a franchise startup is one of the biggest decisions an aspiring entrepreneur can make. Each path has its pros and cons—and making the right choice depends on your experience, capital, goals, and appetite for risk.
In this post, we break down the key considerations between business acquisitions and franchise startups, based on expert insights from lending and franchise consultant Beau Eckstein.
🔑 Key Differences: Franchise Startup vs. Business Acquisition
✅ Franchise Startup: Tried, Tested, and Supported
Franchising offers a proven business model, established brand recognition, and built-in support systems. According to Beau, these are some of the strongest reasons to consider a franchise:
- Easier to finance through SBA loans
- Lower risk of failure compared to independent startups
- Built-in marketing systems and lead generation
- Operational playbooks to follow from day one
Franchise startups are especially attractive to first-time business owners who want to minimize trial and error. In many cases, franchisors even assist with site selection, marketing, and initial training.
“If you want something that’s tried and true, I would buy a very established franchise with a proven model. Easier to finance, lower risk of failure.” — Beau Eckstein
🏢 Business Acquisition: Buy Revenue, Buy Time
On the other hand, business acquisitions allow buyers to step into a cash-flowing operation with existing customers, employees, and infrastructure.
Pros of acquisitions include:
- Immediate cash flow
- Established customer base and brand
- Avoids the “startup grind” of building from scratch
However, the acquisition route also brings unique challenges:
- Harder to find the right fit (many people search for a year or more without success)
- Due diligence is critical (you’re buying past performance, good or bad)
- Cultural or operational changes can be tough to implement
Beau notes that many clients looking to acquire a business eventually pivot to franchising after a long and frustrating search.
“A lot of people call me for business acquisition financing, and a year later they’re still looking and frustrated. Then they start considering a franchise instead.”
💰 Financing: Which Path Offers Better Leverage?
🏦 SBA Loan Comparison
Both franchise startups and business acquisitions are eligible for SBA 7(a) financing, but franchises are often easier to get approved due to their standardized models and historical performance data.
- Franchise Startups:
- SBA lenders are more comfortable with familiar franchise brands
- Higher loan-to-value (LTV) ratios are common (up to 90%)
- Franchises on the SBA registry fast-track the underwriting process
- Business Acquisitions:
- Lenders scrutinize the seller's financials, tax returns, and transition plan
- Deals can fall apart due to poor documentation or seller issues
- Financing terms vary greatly depending on the business's health
👤 Which Path Is Right for You?
Ask yourself these key questions:
- Do you want to build from scratch or step into existing operations?
- Are you comfortable figuring it out yourself, or would you prefer a playbook?
- Is your risk tolerance high enough to start something new—or do you want the security of a proven system?
There’s no one-size-fits-all answer. Some entrepreneurs start with a franchise to build experience, then branch into independent ventures. Others prefer the autonomy and upside potential of a unique acquisition.
Beau encourages individuals to explore both and see which aligns with their lifestyle, goals, and available capital.
📍 Ready to Explore Opportunities?
Instead of endlessly scrolling BizBuySell, Beau recommends heading over to FranchiseResaleListings.com where you can:
- Get curated resale listings
- Sign up for a weekly inventory update
- Find franchise resale opportunities that are already producing income
If you’re still unsure which route is best, visit BookWithBo.com to schedule a free consultation and get expert insights tailored to your situation.