--- title: Buying a Franchise - Step five description: Buying a Franchise - Step five image: https://blog.dcstrategy.com/hubfs/shutterstock_92845171.jpg --- [![DCS_Logo_Charcoal (1).jpg](https://blog.dcstrategy.com/hs-fs/hubfs/DCS_Logo_Charcoal%20(1).jpg?width=1147&height=285&name=DCS_Logo_Charcoal%20(1).jpg "DCS_Logo_Charcoal (1).jpg")](http://www.dcstrategy.com) Open main menu Close main menu [Buying a franchise](https://blog.dcstrategy.com/topic/buying-a-franchise) [franchise consulting](https://blog.dcstrategy.com/topic/franchise-consulting) [Growing Your Network](https://blog.dcstrategy.com/topic/grow-your-network) [News and Events](https://blog.dcstrategy.com/topic/news-events) # Buying a Franchise - Step five [online](https://blog.dcstrategy.com/author/online) Step five of our series on buying a franchise is looking at whether an established franchise location or a new franchise location is best for you. If you’re happy with what the existing franchisees have told you, then you might have a decision to make as to whether you choose to buy an existing store or start a new store in a ‘Greenfield’ location. Let’s assume for a moment that you’re the type of person who can tolerate a reasonable level of risk and as such, you’re prepared to venture into a new ‘Greenfield’ franchise where the franchisor has not operated from a location in the area or within the territory. What should you look for, what are the questions to ask and how do you arrive at a commercially sound decision? Some of the benefits of taking on a new ‘Greenfield’ franchise include: - No goodwill is payable to a previous franchisee - It is a brand new operation and the local reputation of the business can be established as desired - If it is a site based franchise, the landlord may be prepared to make a contribution toward fit out and/or negotiate the lease terms to link rental to sales levels. Obviously, the balancing factor is that you will not have the certainty of a proven trading history for that particular location. As an alternative to a ‘Greenfield’ franchise, an established business enables you to take some comfort in the proven trading history so, in effect, it is generally perceived as a lower risk option. However, you may have to deal with the history of the previous franchisee. If the premises or vehicles are looking a little tired, a refurbishment or upgrade can restore the appearance. Don’t forget the current franchisee’s reputation in the market – which could be good or bad. Similarly, existing employees could be a positive or a negative influence. A key issue to consider is the potential for further growth of the business; is there more growth to be had or has it reached its peak? There is no substitute in business for having detailed and accurate historical financial information for the performance of a business. The quality of the numbers is crucial and frankly, some examples defy belief – they lack detail and in some cases, any semblance of accuracy. Thus you need to look carefully when considering between a ‘Greenfield’ and an existing location. Once you've looked into this, you should be looking at the next steps in the buying a franchise process. ## Related Articles [![](https://blog.dcstrategy.com/hubfs/BD%20Article%20Headers%20(1).png)](https://blog.dcstrategy.com/understanding-the-role-of-a-franchise-lawyer) ### [Understanding the Role of a Franchise Lawyer](https://blog.dcstrategy.com/understanding-the-role-of-a-franchise-lawyer) Have you ever wondered what a franchise lawyer actually does? 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