Dear Franchise Seekers Blog Readers:
One of our goals is to make sure that you’ve considered all the options during your franchise opportunity search. This means that we take seriously our mission to arm you with all the tricks, tips and best practices of franchises. Take a look at this important technique:
Consider a Franchise Resale
If you are considering buying a franchise perhaps there is an option that you have not thought about- a franchise resale. Statistics show that about 15% of all franchise sales are re-sales. Some of the reasons that franchisees sell their business include retirement, coming to the end of their franchise agreement and deciding to move in to a new venture or possibly a life event change.
The benefits of buying a resale are; immediate cash flow, established business with an existing customer base, opportunity to reach profitability quicker and easier to get in to a retail location without the challenges of finding a location, building out the location, tying up your capital while you wait for your franchise to open-less wait time.
It is important to conduct the same due diligence as if you were looking at any new franchise concept.
What are the standards of the franchisor? What is their corporate culture like? Examine the FDD and most important talk to existing franchisees to learn about their experience in the system.
You will need to find out why is the owner selling especially if it’s such a “great” business? Are there other mitigating factors-check with the local economic development department is there major road construction scheduled? Has the unit been successful and do they have key employees that you will retain or let go? The seller should provide you with income statements, tax returns, and balance sheets how do these numbers compare during your validation with other franchisees in the system? You may also want to have an accountant review the financial documentation.
Again it is important to do your homework and with the right resale opportunity you may be able to avoid the challenging startup period.
Franchise Seekers can assist you through this process. We have a proprietary data base listing many resale opportunities both nationally and internationally. Please contact us for more information.
Your Franchise Broker,
Contact Franchise Broker Vicky Tade
Discuss this article with Vicky Tade, seasoned franchise consultant, and learn some key tips of selecting the right franchise system. Her insights will help you understand what you need to look for in a franchise opportunity to maximize your happiness and your success.