Melinda Emerson breaks down how to buy a profitable franchise

For aspiring entrepreneurs, buying an existing business or franchise can be a faster, less risky path to success than starting from scratch, according to Melinda Emerson, America’s leading small business expert and CEO of Quintessence Group.

Emerson explains on today’s episode of The Small Business Show that many people underestimate the benefits of purchasing an established business. She notes that franchises come with proven revenue streams, operational systems, and loyal customers, giving buyers a head start and significantly reducing risk. She says that starting a business from scratch can be long, stressful, and financially risky.

However, financing options can make these franchise opportunities even more accessible. For example, the U.S. Small Business Administration (SBA), in partnership with banks, can provide loans covering up to 90% of the purchase price, with buyers typically needing $50,000 to $100,000 for a down payment or initial franchise fees. At the same time, sellers may also offer installment plans to reduce upfront costs and tax burdens.

Emerson discusses the trends influencing the franchise and small business markets. In the U.S., there are over 4,000 franchise concepts, of which only one-third are food-related. She points out that the remaining franchises cover a diverse range of industries, highlighting strong growth potential in specific sectors.

Moreover, she identifies five booming sectors for franchises:

• Health and wellness
• Elder care services
• Education and youth development programs, including after-school, STEM, and STEAM initiatives
• Pet care businesses
• Other service-oriented sectors with growth potential

She also mentions the “silver tsunami” in the small business world. She notes that roughly 40% of small businesses in the U.S. are expected to change hands in the next five years, as retiring owners or those unwilling to adapt to new technologies look to sell. Many of these businesses generate under $1 million in revenue, making them affordable yet highly profitable for buyers.

Additionally, Emerson believes business owners should plan their exit three to five years in advance, implementing management structures and systems that allow the business to operate independently of the owner. Buyers must conduct thorough due diligence, reviewing three to five years of audited financial statements and ensuring the company aligns with their skills and goals. Trust, chemistry, and how the buyer intends to treat staff are crucial factors in any transaction.

"If you could benefit from a brand somebody else already built, and it's a healthy business with contracts and revenue, recurring revenue coming in, man, I would take that bet all day and twice on Sunday."

However, finding the right business requires research. Buyers can work with business brokers, franchise consultants, or explore the resale market for established franchises. Non-public listings often require letters of intent or NDAs to access financial information, while franchise agreements, which are often 150 to 300 pages, require specialized franchise attorneys for review.

Emerson explains that identifying the right opportunity may take up to two years, but once a decision is made, a well-prepared buyer can close the deal within 60 to 90 days.

Emerson recommends that potential buyers explore hybrid opportunities, such as purchasing an established franchise that has been successfully operating for several years. By capitalizing on someone else’s hard work, a recognized brand, and a steady revenue stream, buyers can accelerate their growth and profitability. Some businesses that generate $1 million in revenue can yield owners’ take-home profits of $600,000, which she notes as figures that are challenging to achieve in traditional corporate jobs.

Acquiring an existing business or franchise offers a lower-risk, faster route to entrepreneurship than starting from scratch. While strategic planning, professional guidance, and careful due diligence are crucial, the rewards can include immediate revenue, a loyal customer base, and significant profits.

Join Emerson January 22-24, 2026, at the Next ACT CEO Summit here.