Exit Plan

Do Your Franchisees Have an Exit Plan?

Franchise Resales is 12 years old and most of our team members have been a part of the franchise industry for many more years. With a growing team of account managers, support staff and marketing, we can definitely be a valuable addition to your resale process.

We have worked with Franchisors and their Franchisees for 12 years to help prepare them for their exit from the business. Developing an Exit Strategy, to put it bluntly. Not only will an exit strategy help your franchisee to be prepared, but it will promote growth and help you – the Franchisor – to increase your own profit. We have sold a wide range of franchises for many different reasons, but one thing we know for certain is that having an Exit Plan puts franchisees in a much better position when the time comes to sell. Even if it ends up being an earlier exit than you or your franchisees would have liked.

We are resale specialists, we pride ourselves on our resale process which has been developed over the last 12 years and is absolutely proven to work. Selling a franchise is not an easy process, with so many parties involved it can get a little tense at times. During a sale, we liaise with all parties involved to ensure the sale goes as smoothly as possible. We see the sale through to the very end.

Our Vision is to help as many franchisees as we possibly can to get a return on their investment. When it comes to selling a business, getting the best price for it will depend upon how much planning was involved at the start. That’s why we are calling on Franchisors to ensure that their franchisees are as prepared as they possibly can be, and they will ultimately make more profit in the process.

Resales are a great thing for a franchise. Especially profitable ones. They show people that the brand is successful and growing, and with new franchisees come new ideas and a new zest for business.

Eventually, the time will come for all franchisees to sell, pass on or close their business. The more prepared the better! So we are offering Free Exit Planning Seminars. Whether your franchisees are just starting out or have been established a while, these seminars will help to confirm the message you are sending to them. “planning for the future is essential”

How does Exit Planning help your franchisees and you?

It’s an exciting time when your franchisees are getting their new business off the ground. Their time and effort is spent making all of the urgent decisions. Oftentimes an Exit Strategy is the furthest thing from their minds. But it’s at the point that they are buying their franchise that they should be thinking about their Exit Plan and it should be firmly embedded into their business plan.

When your franchisees know exactly what they want to achieve right from the very start of their franchise journey, they increase the likelihood of walking away with a return on their investment. As well as showing your other franchisees and prospective franchisees just how lucrative a franchise in your network can be.

Regardless of your franchisees reasons for selling their franchise, be it retirement, handing the business down to the next generation or selling to make a profit, a plan is needed. The more robust the plan, the better the chances of succeeding.

Of course, even the best-laid plans don’t always go smoothly. In the event of a franchisee needing to sell urgently, a franchisee who has thought about this at an early stage will no doubt have an easier time trying to sell their business than one who has no plan.

We know there may be changes along the way, but we also know that a franchisee with an Exit Strategy is likely to achieve a better price for their business than one who is not prepared.

Why not give us a call today and book your Free Exit Strategy Seminar you know it makes sense.

Minster Cleaning Services – Devon & Cornwall

Established in 1995, Minster Cleaning Services Devon and Cornwall is a successful and profitable business which has grown year on year and now has a turnover in excess of £580,000.

Client retention is excellent, and an active marketing programme is in place to win new business.

The business is located on an industrial estate with easy access to the main A38 artery which allows both counties to be serviced easily.

With the hard work and dedication of the franchisee this business now has over 100 contracts in place throughout Devon and Cornwall. This ready-made profitable business is for sale as the current owner wishes to retire.

A day in the life of a Minster Cleaning Services Franchisee

As a Minster Cleaning franchisee, no two days are the same. People management skills are essential in order to manage a large workforce of cleaning operatives, field supervisors and office staff as well as numerous office and commercial cleaning contracts.

The start to a typical day involves reviewing emails to prepare for any issues that may have arisen since the previous day. It is important to check if any cleaners haven’t turned in for any reason and then ensure that relief cover is put into place. Minster Cleaning Services branches aim to be the preferred choice for office and commercial cleaning services in the area, so it is important that clients have no reason to be dissatisfied in any way.

The next job is to deal with any outstanding quotations. Commercial cleaning is an essential business and a multi-billion-pound market in the UK. There are always prospective clients to chase up, as well as ensuring they have all the information about the service offering.

Minster has done particularly well in the healthcare sector since the requirement for all primary medical services to be registered with the Care Quality Commission (CQC) was introduced in April 2013.

Minster’s knowledge of implementing cleaning regimes and practices which comply with the CQC standards for registration has proved to be invaluable.

An important part of the working day involves visiting prospective clients to gather the information required to put together a comprehensive quotation for a commercial cleaning service tailored to their precise needs.

About Minster Cleaning Services

Minster Cleaning Services is one of the UK’s leading management franchise business opportunities.

Established in 1982, and now boasting a network of over 40 franchise branches nationwide, Minster Cleaning Services is the biggest and one of the most successful commercial cleaning franchises in the country.

With a Minster Cleaning Services franchise, you will receive exceptional support from an experienced and dedicated team, including marketing channel management and branch marketing planning, operational guidance, finance, IT and general support.

Do you need to own property to lend from a bank to buy a franchise?

Do you need to own property to lend from a bank to buy a franchise?

A question we get asked frequently from prospective franchisees seeking funding is whether or not
they will have to put their properties at risk when looking to borrow money from a bank. Banks will
refer to this as security and the level when this would be needed will vary from bank to bank.
Typically if you are looking to borrow less than £25,000 banks are happy to lend without security
being taken.

If you are looking to borrow in excess of £25,000 it is likely that the bank will require you to put up
personal assets as security for any loan agreed. This could be in the form of taking a charge against
property with sufficient equity. However, if you don’t have a property available, it doesn’t necessarily
exclude you from lending more than £25,000.

If you have a strong business plan and suitable deposit but don’t have any personal assets to support the lending, then the bank may be able to consider financing your plans using the Government-backed Enterprise Finance Guarantee Scheme. Sometimes referred to as EFG, the scheme is designed to provide entrepreneurs with the security needed to access greater levels of funding, as it would guarantee up to 75% of the amount you borrow from the bank. This scheme may require a slightly larger deposit and does come at a premium, as the government will charge an annual 2% fee for the guarantee. Speak to the bank’s Franchise Department for guidance as to whether you would be eligible for this scheme, as you would need to ensure that you have fully invested your available assets into the business before being eligible. This would include all of your personal savings and investments, along with any available equity in properties that you own. It is also important to remember that you would remain fully liable for the total amount being borrowed, as banks would also take guarantees from you as an individual to cover the full amount being borrowed.

It is essential to thoroughly research the opportunity and fully consider the financial implications
before buying a franchise. You are entering into a long term commitment and need to get the
funding right at the outset. Don’t try to press ahead with insufficient capital, putting unnecessary
pressure on the business from the outset, but don’t borrow more than you can comfortably afford to
repay.

Being the boss…

Since time immemorial people have been interested in running their own business, and according to The Office of National Statistics, in 2001 there were 3.3 million self-employed people in the UK (12% of the labour force) which rose to 4.8 million by 2017 (15.1% of the labour force). More and more people are looking to become their own boss and why not, the perks and flexibility are pretty great! However, there are also risks associated with being self-employed. Some of these risks can be dramatically reduced when you look into buying a Franchise, and reduced further still when you look to take on a Franchise Resale!

One of the many reasons people choose to become self-employed is the ability to be able to build up your business and then sell it on at a profit when you want to move on or retire. Depending on the type of person you are and the business sector you are in this can be achieved whether you are going it alone or becoming part of a franchise network. However, with a franchise network, you have the added security of the already proven systems in place that you can follow in order to reach your destination – selling your business as a going concern at a profit.

The benefits of buying a franchise over starting on your own include; training, established reputation, support team and the equipment & products required in order to run the business. But you also have the knowledge that someone has already done it and has been successful. However, you still need to build the business, you are starting from scratch, but with a franchise resale, the business is already there. Initially, you might have to pay more than you would for a startup, but you have the opportunity to make a profit from day one, the business is already up and running with the staff in place. What could be better?

Another fantastic reason to take the plunge and buy a franchise resale is that on top of the fact that you have a business that you can walk into, you will be trained by the Franchisor and experience of the sector is not always necessary. This means that, if you fancy a total career change there are plenty of options open to you! All without the risk of starting from scratch and going it alone.

You can eliminate the unknown. Starting a new business can be difficult as people often buy from a brand they know and can trust. Unless you already have a reputation where you plan to set up your business, you may find it difficult to find new customers and gain their trust. With a franchise resale, the business usually has a regular customer base, and you have the brand recognition to back you up as well.

According to research 8 out of 10 new businesses fail within the first year. In contrast to that according to the NatWest and British Franchise Association survey, 95% of franchisees report profitability. From a finance point of view, these statistics are very important. A start-up can be very difficult to secure funding for. However, banks do look rather more favourably on franchises as your business plan can include more accurate projections based on the franchisor’s experience. With a resale, you have the outgoing franchisees history behind you too.

The franchise sector has a fantastic array of business with proven models for success. You can become a part of this lucrative industry. A franchise resale means that you can become your own boss, walk into a business that’s already up and running with the training and support from a franchisor.

Run your own business with freedom and independence but with guidance and structure that has been proven to work many times over.

Contact us on 01522 246811 to find out more, or take a look at the franchise resales we have at www.franchiseresales.co.uk/franchises-for-resale/.

What to expect when selling your franchise

What to expect when selling your franchise

Starting a franchised business and generating a profit is fantastic, however, what do you do with the business when you want to retire, or fancy a career change or even if something unexpected forces you to need to take time off? The earlier you start making arrangements for exiting your business the better. Call it a goal, what do you want to achieve from your business? For most people, they would want a return on investment. The only way to achieve that is to plan for it.

In most cases, the terms of exiting the franchise will be written in your franchise agreement. However, it is important to understand that the franchisor will have the ultimate say on who will buy your franchise. The person buying the business will need to be right for the franchisor and have the skills necessary to carry on running a successful business within the particular franchise. The earlier on in the process your franchisor is notified the better, you don’t want to find yourself a buyer only to have them turned down by the franchisor at the last minute.

When you do decide to sell your franchise, prospective buyers will want to see a ‘neat and tidy’ business. In order to sell your business for the best price, you will need to be open and honest about your business. A Prospectus of Sale will need to be written which should include; a description of your franchise, the price you wish to achieve, your turnover and adjusted profit history, copies of accounts and up to date management accounts, will be required along with full details of any equipment owned/leased and information regarding key contractual information (e.g employee, suppliers, landlords).

When it comes to valuing your business you have to be objective. The value of a business is viewed differently by the person currently running it to that of the prospective buyers. Buyers want to see that the business can generate and maintain earnings/profit. If you decide to sell your business then you must be able to show this, so putting it on the market and then not continuing to work on the business could mean you will lose out. The formula to determine the price your business will be sold at will be determined by the sector you operate in and the current market conditions. To get the best possible price you need to have planned for your exit and worked hard to implement your exit strategy.

Deciding whether to sell your business as an Asset Sale or a Share Sale. If you run your business as a limited company a big decision for you is to sell the assets of the company or the shares of the company? If you decide to do a share sale, you will sell the limited company and so there is no need for a formal transfer of assets. If you decide to go down the route of an asset sale you will only need to formally transfer all the assets to either the buyer or a new limited company. There are pro’s and con’s to either route but this is something that you will need to decide with your accountant before you agree on a sale.

Selling your franchise does take time. There are lots of things to consider, but it will be easier if you have made these decisions beforehand and are prepared for your sale. When selling a franchise not only must you keep running your business, you also need to find a buyer, liaise with the franchisor and buyer, then once you have franchisor approval and a price agreed there will be a need for solicitors to become involved. Balancing all of these things can be tricky and when emotions get high, things can go wrong very quickly.

By instructing a dedicated resale broker to handle your sale you can focus on running your business in order to get the best price possible. Here at Franchise Resales, we will take you through the whole process. We will value your business, create a web advert and advertise your business to find the right buyer, create a prospectus of sale, liaise with you, the franchisor, the buyer and all the solicitors right through to the sale completion.

If you would like more information on selling your business call Keith on 01522 246811 and get a FREE Market Appraisal.

Working With A Family Member

Working With A Family Member

The franchising industry has a huge number of family owned and run businesses. This is interesting as this has a direct correlation with the idea that franchising can support a work-life balance that new franchisees are often looking for.

Over the last 18 years, I have met a combination of husband and wife, mother and son, father and daughter even grandad and grandson. It can work really well but it can also be fraught with problems and emotional intensity. One of the biggest issues for a husband and wife team especially, in the early days is the fact that they can’t even have a day off together let alone go away on holiday. Unless they shut the business or get someone in to man the fort then holidays are a no go.

It’s really interesting when you listen to conversations where a couple will have explained that they work together, there is usually someone in the group who will say “I could never work with my partner” There are lots of opportunities within the franchise sector that really do work well with a husband and wife team heading up the business. I know lots of franchisors that actively recruit husband and wife teams. Indeed in the early days, McDonald’s actively recruited husband and wife teams.

Our businesses are no exception. The Franchise Resales board of directors is made up of myself and my Son Michael Bohan, and Dave Williams. The Franchise Professionals (TFP) is again my son and I with husband and wife team Ben and Teri Wright as shareholders who are both active in the business.

Michael and I have worked successfully together for the last six years and so far so good. We are both really passionate about our businesses and whilst we have similar temperaments and similar ideas about what should be done, and where we want the businesses to go we have very different skill sets which helps tremendously.

As a franchisor recruiting family teams to run franchise outlets, there are 3 main things that I would say need to be taken into consideration.

1. It seems an obvious point but, do they realise that they won’t get time off together without closing the business for a while until they are in a position to have trustworthy staff in situ. Until then the reality is that they have a self-employed job rather than a business that will bring in money and keep running whilst they are away.

2. Another factor is their individual skill sets. If they are so alike that they will want to occupy the same type of role within the business then who will do the bits that they either don’t like or are not good at.

3. Last but not least, are both members equally enthusiastic. We see Dads buying a business for their offspring. This is great if offspring wants the business. Sometimes the parent is buying them a job that they don’t want. It’s easy to allow this if the parent is waving a chequebook. But, make sure the person who’s going to be running the business is actually interested.

This all might sound obvious but believe me, we get people coming to us to sell their franchise purely because they have discovered that they can’t work together or because the person meant to be running it has gone out and a found themselves a job!

When Michael first joined me, and we started taking the businesses forward we most definitely couldn’t take time out together when family events were organized. But, as the team around us has grown – there are 13 of us now! – this is less of an issue. However, let’s face it when you run your own business, are you ever really not at work. We do get into trouble sometimes with family when we start “talking shop” at family events.

Investors in Franchising

Investors In Franchising

Franchising is changing! Up until the last few years, a Franchise business has generally been run by an owner-operator making sure that the business is performing, and that the staff are following the systems and processes set out in the Operations Manual by the franchisor.  By being close to the ground, and working in the business franchisees are the reason why franchising has always been so successful… but times they are a-changing.

For a few years now we have been seeing a slant towards Investors buying franchises and putting managers in place to run the business for them. As this practice grows, more and more investors are buying a range of franchises and building their own business portfolios.  The Entrepreneur Visa is certainly bringing more and more investors from overseas and many of these are looking to invest in a franchise.  To begin with, Franchisors were sceptical; would this work, will the business grow in the same way? I guess to a certain extent it’s being tested, as any new and innovative process should be.

With any business you need the leader to be taking the business in the right direction with the team following closely behind them so, there is an argument that this can be the franchisee or a good manager. One of the downsides to investors coming into a franchise group is that they are normally all about the bottom line! If the franchisee doesn’t have passion or enthusiasm for the business it tends not to grow to its full potential! Don’t get me wrong, it will do well but, putting the right team in place will make a difference. The question that Franchisors ask is “can investors find managers who really believe in the product or service”

We receive lots of calls from people who have invested large amounts of money in a franchise and after 6 months it’s not making them the return on investment that they want out of it! This happens for a number of reasons, poor recruitment practice being the main one! The difficulty is that when someone buys an existing business they are looking at the historical performance, not potential! If they wanted to buy on potential they would buy a cold start. Selling a franchise business with no history is very difficult unless it’s a really well-established brand with no greenfield areas available.

The Food & Beverage Sector has had multi-brand franchisee investors for some time now but, that doesn’t mean it will work with every brand. Some brands need to take a more hands-on approach to the business, which an investor would not offer.  We all know that just because they have the money and they can fog up a piece of glass doesn’t make them the perfect fit for that franchise. There are interesting times ahead and I for one am really curious to see how this will pan out…

Mental Health at Work

Mental Health at Work

It’s Mental Health week this week and this had my mind wondering about how we, Michael, Dave and I are able to spot anything that could be a mental health problem in the workplace and how we might be able to adapt our systems and processes to support someone.

It’s easy to say “well surely you would know if someone had a mental Health problem” but it depends what you mean by Mental Health. As far as I understand, it can range from being stressed over something at work or in our social lives to becoming clinically depressed and having a complete mental breakdown.

People who own their own businesses can have a whole host of things that can cause stress, and this stress can manifest into physical illness if we’re not careful.

* financial worries – perhaps getting too close to the overdraft limit and having no sales coming in for a while to cover invoices that need paying

* staffing problems – for example lack of resources to complete jobs to satisfy customers

* unhappy staff – staff with personal problems etc.

These things can amount to plenty of stress for the business owner. So what’s the answer – well if I knew that I’d be doing a very different role to the one I have now!

However, I do know that we can easily bring stress on ourselves simply by being unorganised. If the systems in the business are not efficient or effective this can cause stress for all concerned – the business owner, the staff and customers will all suffer causing even more stress.

But how would we know if a member of staff had a mental health problem? Regular meetings on a 1-1 basis can help especially if you have a good rapport with your team members. Understanding things that might be wrong at home can mean that you might be able to make some allowances at work until things improve.

We know our team well so if someone is getting a bit snappy or they are unusually quiet, or their works not up to standard its easy to take them to one side and ask if there is a problem that we can help with. Stress can easily become depression and this can take many forms and it’s not always easy to spot, so I think that good open communication channels are really important.

Getting the team to work together is really important here because sometimes others in the team might need to pick up the slack for a while and offer a bit of moral support. If I had someone I was really worried about I would encourage them to take some time out and get professional help.

Promoting mental wellness to my mind is the best way to ensure that our team has positive mental health. Work can be fun but still remain professional. We encourage the team to talk to each other. We arrange team activities that enable them to work and play together. A meal out and inviting partners does it for us. BBQ’s in the summer or simply finishing work early if it’s hot and quiet also help.

Every business owner will agree that keeping customers happy is a top priority, but we need to remember that our staff are our customers and they need attention too.

I’d love to hear what you do to help your team to have positive mental health?…

Why are resales good for a franchised network

Why are Resales a good thing for your franchised network?

When I started working with Franchise Resales nearly 6 years ago, I suppose I thought exactly the same as most of the people we speak to when they think about resales… they must be selling it because it’s not doing very well.

However,  this is not always the case, people buy franchises and then sometimes life can get in the way. Illness and family issues are often the reason for selling. This is fine if you’ve been there a while and got the business running well, but a bit of a bum deal if you’ve not been there long. There are also occasions when a franchisee will treat the whole thing like a job, and that can hinder the growth of a business too.

What we are seeing more and more is people making a lot of money and living what looks like the perfect life from the outside. But, here’s the rub, when a franchisee gets to a point where they are happily coasting along and there is little growth there, this too can affect the saleability of the business. The other point here, of course, is that franchisors don’t really want businesses that are standing still or worse going backwards because that will reflect poorly on the group as a whole.

If your franchisees are spending more time on the golf course than in their businesses who is driving it forwards? I’m not saying it can’t be done, I’m asking a question about franchisees drive. If they already have what they need, – not everyone’s drivers are monetary – why would they push harder for more?

On the flip side to that, why would a Franchisor rock the boat with their best franchisees? As I have often said, it can take up to 3 years to really get a business ready for sale.  I can count on one hand how many times people have really planned there exit strategy to that degree. If the Franchisee wants maximum return on the business they will have to make it worth it.

Businesses are sold on history. History of the books and sales performance. It’s very different to buying a cold start where you are buying on potential. You have a situation with a coasting or failing franchise where the seller is saying “hey but it has the potential to do so much more” and the buyer is saying “well why hasn’t it then?” This really is where our process of getting buyers in front of franchisors, before they see the franchisee and the nitty-gritty of the business really make sense!

As a network develops getting new blood in from both ends is a perfect way to grow the brand.  New franchisee’s whether they are taking on a new territory or buying a resale are always good for growth.  From a resale perspective, it shows the saleability and ROI for the buyer.

We have been operating for over 10 years now, and we are starting to see businesses we have sold previously, coming back on the market in a stronger position and of course for more money. This means that the next buyer has a different kind of growth strategy for the business.

Some franchisors I know, have created a hub for their larger franchises to really push to the next level, offering different kinds of support and advice for the bigger businesses, this to my mind is such a great idea.

So suffice to say if any of your franchisees, including your top performers, come to you with an exit plan, don’t be upset, embrace it. You should get a new, hungrier franchisee taking the reins and driving that business to the next level, regardless of the reason for sale!

New Beginnings

New Beginnings

Sometimes we can be so involved in the day to day routine that our lives revolve around, that we don’t think about, let alone have time to stop and consider how we actually shape our lives.

We do sometimes choose our new beginnings. We choose to change direction for example by changing our job, going into business, getting married, or choosing to have a baby. These are things that we plan for and expect to happen. But what about the things we don’t choose? Dismissal from work, redundancy, divorce or life-threatening illness. When these things happen it’s a bit like being hit by a cricket bat! Life stops and we are forced into taking stock.
So, do we crawl into a corner until we feel better, or do we look at this opportunity that’s been handed to us and make decisions about what we want from life?
I’ve always been a glass half full kinda gal.  Maybe a bit too trusting that things will work out, but you know what, they usually do somehow.
I recently had a fight with breast cancer and so far I’m winning.  When it was diagnosed my first question was “will I die from it?” “Unlikely,” says the consultant. Ok, “will I need a full mastectomy” “unlikely,” says the consultant. Ok, so we need now to fix it, right? Yes it’s painful, yes I’ve cried a handful of times but, it’s also shown me that I’m a survivor. I don’t give in! My family could have told you that but they call it being stubborn!!
So why am I telling you this? Well, I saw the recovery from cancer process as a new beginning, a chance to make things different. My Son who also happens to be my business partner really stepped up to the mark. His mum was ill and we had two businesses that needed running. So we sat down together assessed the situation and off we went. We redistributed my workload, put aside some of the things that Michael and the team couldn’t do and together we got on with it. Sounds sensible yes? But without realising it at the time we actually altered the course of the businesses making them stronger and more effective. They both took a dip but that was more to do with the economic climate than the fact that I was ill. I could take time out when I felt ill and when the treatment exhausted me and I did. But I could also work when I felt well enough and so I did.
The point I’m trying to make is that we shouldn’t wait until something awful happens to make us change the course of our lives or our businesses, we should actively explore opportunities to take stock of our lives, take a birds-eye view of our businesses and ensure that they are what we want them to be. If they’re not, then change them.
Creating a new beginning can be life-changing, invigorating and exciting. I am truly thankful for the events in my life and the new beginnings I’ve experienced. They make me what I am, a successful businesswoman, daughter mother and grandma, who loves what she does and loves life.
I will continue to create my new beginnings. When will you start yours?