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Business as 'Usual'

Business as ‘Usual’

We all know how unpredictable business can be, even at the best of times. Nevertheless, nobody could have anticipated the current situation when we welcomed in 2020 and entered the new decade. Business, as we know it, has changed – but that doesn’t necessarily mean that it has to stop. Whilst we understand that some businesses have had no other option but to cease operating, others have been able to adapt to the current climate in order to help their customers, and even create new customers in the process.

 

Here at Franchise Resales, we have been fortunate to continue trading with some changes being made to the way we work, in order to adhere to government guidelines and maintain safety for our team and customers. A majority of our team already work remotely; our team are based around the United Kingdom – from Scotland down to Kent. Our processes ordinarily involve a large number of online services, including business evaluations for new businesses coming to the market. Telephone conversations with prospective buyers, franchisees, and banks, to name a few – are standard practice here at Franchise Resales; none of this has changed for us.

 

However, we would usually arrange face to face meetings for prospective buyers with franchisors and franchisees – we have now replaced these meetings with video or telephone calls. What is interesting is that we are discovering that these online meetings are productive and successful.

 

We know that buying a franchise resale is a ‘low risk’ way to start and run your own business, and now, more than ever, is that statement true.

If you are considering buying a business, a franchise resale could be the perfect choice for you right now. The businesses that we have on the market provide the perfect foundation for you to begin the journey to becoming your own boss. Each one has an established and loyal customer base, regular turnover, as well as a stable reputation.

 

It takes time to buy a franchise and time is something that many us have on our hands right now. Why not use that time to explore some of the franchise resales that are on offer right now.

 

We can begin the process with you and help you to find the perfect business for you. We will guide you through the business, arrange an online meeting with the franchisor, introduce you to the franchisee, and point you in the right direction when it comes to funding and creating a business plan.

 

We hope to hear from you soon, and stay safe!

Woozelbears Case Study

Woozelbears Case Study

Woozelbears – Canine Hydrotherapy

 

The Woozelbears brand was beginning to grow, Charlotte – the franchisor, had recruited five franchisees by the time she had made her initial enquiry to sell on the 9th of July.  Charlotte’s Witney branch was the initial operation of the Woozelbears network.

Due to the location of the site being a 5-hour journey from Charlottes home, she made the decision to sell her franchise in Witney in order to progress the company via the franchising route as she was going to need money to invest in more potential franchisee’s.

 

The Beginning – Valuations and Listing Agreements

Charlotte chose Franchise Resales due to a recommendation by one of our funding partners; she says, “I chose the company based on a recommendation from franchise finance, there isn’t another company that provides this service and they were responsive to my enquiry.”

Franchise Resales Lead Manager, Keith Halsall, initially dealt with Charlotte’s enquiry to sell. He provided a Market Appraisal on the business which supplied her with a price to sell. Keith had to work with Charlotte whilst completing the Market Appraisal as the accounts were complex due to other business ventures. Together, they generated a price which both parties were happy with.

Being a relatively new franchise brand, which operates within a specialised sector, made the valuation moderately subjective. As Charlotte herself states, “Initially you always over value your business as the owner, and really, it’s only worth what someone will pay for it in the current market. With it being a niche business, I knew it would be harder to find a buyer than your standard franchise.” Charlotte and her accountant valued the business at £220,000 with an asking price of £240,000. Franchise Resales believed this figure was above market price due to it being a brand with little history and never having had a resale to gauge against. Keith was happy to list the business at Charlotte’s desired asking price, with the provision that if the market feedback shows that the price is too high, we could lower it.

Advertising

Advertising was a concern for Charlotte, primarily about finding a specialist buyer via broker websites. Franchise Resales and Charlotte came to a mutual understanding that if a buyer was found through direct advertising at dog shows, then no completion fee would be charged.

After several phone calls, Charlotte agreed to our terms and conditions and the listing agreement was sent out for signing. Circumstantially, we can be flexible with requests – Charlotte asked if we could put a special term in our agreement regarding finding a buyer from a veterinary exhibition. Charlotte said, “If I found a buyer from a veterinary exhibition, I asked for the fee to be reduced.” Franchise Resales agreed to her request and the Listing Agreement was signed at the end of July 2018, and the initial setup fee was invoiced and paid.

 

 

 

Prospectus Process

On the 27th July 2018, Keith sent out our Prospectus Information Form to Charlotte for completion. This is a form that the seller completes in order to provide us with a true understanding of the business. Once we have this information, we produce a Prospectus of Sale which provides buyers with all of the information they require to make an informed decision about potentially purchasing the business.

On the same day, a coming soon email was distributed to our database of potential buyers. This is a quick, vague email; it includes the business name, sector and general location. The concept of the coming soon email is to arouse initial interest so that when the Prospectus information form is back, we are able to contact the initial enquiries immediately, prepared with any information they may request.

Charlotte was pleased with our prospectus, stating that, “the prospectus was professional and well put together. I was pleased with the outcome and very few changes were needed to present it to the public. We did review it once during the process to keep it current.”

Occasionally, during this part of the process there can be some teething issues. Whether it’s from not enough information inputted into the forms, lack of clear communication, or a difference of expectations. This instruction was no different, in the early stages of our relationship with Charlotte there were a few minor issues that came to light. We had changed an internal process and unfortunately, the business was not advertised as quickly as we both would have liked.  The issue was swiftly resolved by one of the Directors, Michael Bohan. The business went live on external websites at the beginning of September and New Instruction Emails went out three times over the next 6 weeks.

Lead Enquiries and NDA’s

Over the next couple of months, leads were few and far between; none of which were looking promising. However, on the 15th November 2018, we had an online enquiry from Darren Brown. Franchise Resale’s Lead Enquiry Trainee, Ellie, dealt with the enquiry and sent an email to Darren informing him that an Account Manager would contact him and attached Franchise Resale’s Top Ten Tips for Buyers, and the Buyers Guide to Buying a Franchise Resale.

During the initial telephone conversation, Darren explained his situation and why he was interested in Woozelbears. Darren had 25 years’ experience working in Blue Chip companies, finishing his last senior role at the end of 2018. Darren had some equity behind him, meaning that he had the opportunity to buy into a business.  He explained that he was interested in a business that he could develop and had growth potential. It was essential that he would be buying into a sector where there would be genuine interest for himself and his wife to become involved. Ellie was pleased with what Darren had said and agreed to issue an NDA (Non-Disclosure Agreement).  All potential buyers through us have to be qualified and sign an NDA to receive any information on the business/es they enquire about.

On the 30th November 2018, Darren signed the NDA and was passed over to our Relationship Manager, Patricia Hayward, to receive more information, the financials and the business’s accounts. Darren could not progress any further until his current job contract had finished, also, with Christmas around the corner, Patricia and Darren agreed to cease contact until January 2019.

Darren states, “I found Patricia to be respectful and helped chased things along without being too pushy.  It was clear she only had limited knowledge about the business and the accounts, so it was good that there was a deeper level of knowledge and support within Franchise Resales to guide me through the  process.”

In January 2019, following conversation with Patricia – Darren agreed to fill in one of our Profile forms. This is a form that we ask buyers to complete in order for the franchisor to gain a good understanding of who they are. The franchisors needs to acquire personal information about the potential buyer interested in joining their network. Until a Profile form is completed by a buyer, we will not arrange a meeting between the buyer and franchisee/franchisor. Franchising is a process; if the buyer is unwilling to fill out the profile form, then how likely are they to follow a franchisors processes when they are in the network.

On the 5th February 2019, Darren returned his Profile form and Patricia arranged for him and charlotte to have an initial meeting on the 7th February 2019 at the Witney branch.

Darren said of his meeting, “It was good to meet up with Charlotte at an early stage to help us get a feel for the business and Charlotte who as the franchisor will continue to play a major role in the business.  The meetings we had were very open and informal and it was clear there was a mutual level of interest.  I was impressed with what Charlotte has achieved and importantly what I felt she could also go on to achieve.  She is clearly a classic entrepreneur, with lots of energy to get things done.  It was clear that the business had expanded to a point where some further management support and different thinking could be beneficial for future development, which was another big plus for us.”

Negotiations

The negotiation process is not as straight forward as it may seem, The team at Franchise Resales endeavours to work on behalf of the buyer and seller to make the transaction as smooth as possible. Darren says, “I think the negotiation period was longer and more complex than I expected, but I think much of this was driven by the fact that the future business structure was being devised as negotiations went along.  It was not a simple acquisition of a going concern.  I felt your role was pivotal in helping both sides try and balance an agreement.  At times it was looking like it would fall through, but unquestionably your communication and willingness to try and find solutions helped to get things over the line. I did feel the process of establishing a Memorandum of Understanding before moving to the legal stage was invaluable and helped to ensure the legal process, although quite involved, did have the benefit of  working to a clear framework of agreements.”

The legal process to completion

The negotiation stage is a critical part of any deal; this is where the Account Manager takes control over the proceeding negotiations. We request all offers to be in writing – preferably via email, it’s not a legal binding document – it’s an offer of intent to buy. Darren made his offer via email on the 4th April 2019, the original offer required negotiating and the final offer, following three months of negotiations, was agreed on the 1st August 2019. Darren had done a lot of due diligence himself, which would normally be done by a solicitor, to keep fees manageable. But at last, the deal has been completed and legal process complete!

Speaking of his experience through the negotiation and legal process, Darren says, “Based on previous experiences, I had expected this process to be lengthy and given the construct of the agreement and the changing company structure and loan guarantees it was always going to be that way. That said, both because of the work put into the MOU and also because the 2 legal advisers where pragmatic and efficient, I did not feel the process was held up due to much additional legal negotiations and inefficiency’s which can often happen.  I think the legal company recommendations from you turned out to be a big plus.  The only niggle was that both solicitors were very busy with other clients so sometimes there were longer response times than I would like to have seen, but in my experience, this is sadly normal for legal companies.”

 

 

Summary

When asked about her working relationship with Franchise Resales, Charlotte said, “I think I could have done with taking more advice from other professionals along the way for ways to package the business up and negotiate ideas …The communication regarding negotiations were dealt with very attentively by Michael, morning, noon and night! He always gave the time that was required and positively progressed the sale at every stage.”

Darren states, “I believe your business played an essential role in the sale. I found you very easy to work with, prepared to listen and understand concerns and try and work to push things forward.  I would also recommend your business to others.”

Are you thinking about selling your franchise?

Are you thinking about selling your franchise?

Are you thinking about putting your franchise on the market? Begin by asking yourself some of these key questions.

 

Why Do You Want to Sell?

 

A potential purchaser of your franchise will be curious about why you are selling – be honest about your reasons. There are many reasons for sales; your franchise may have been a short-term plan, to start a new business venture or to begin retirement. It might be the case that the sale is not planned – sudden illness or change in circumstances may force a quick sale. 

 

Additionally, it could be the case that the business is not the right fit for you; therefore, it is not performing as well as it could be. Whatever the situation may be, you need to have a realistic plan that you can present to a prospective buyer. If a buyer cannot see the potential – they will not invest.

 

What Are the Variables of The Sale?

 

Ensure that you understand what you are selling, as well as how much you want to sell for. Begin by putting together a list of assets connected to your business that will be included in the sale. You should also consider whether your business will be sold as an Asset Sale or a Share Sale. Value the assets that you have and make sure everything is in order before you enter the market.

 

If you are unsure about how much your business should sell for – enlisting the help of a broker is vital. We will help you to value your franchise; we analyse current market trends in order to give you a realistic price for your business. 

 

Finding the Right Time and The Right Buyer

 

When deciding on the best time to sell, consider whether you need to complete the sale sooner rather than later. A sale can take up to 18 months to complete due to a variety of factors, therefore, where possible it is important to allow enough time for the process. To ensure a smooth sale once you find a buyer, you should make sure that your business is in order. 

 

You then need to consider where you are most likely to find a buyer. There are numerous possibilities here, as well as the many ways you could advertise your business for sale. Alternatively, enlisting Franchise Resales to manage your sale means you can have a smooth sale from beginning to end, as well as advice on how best to prepare your business for the sale. 

 

Have a professional Prospectus of Sale

 

Providing a professional sales prospectus will allow prospective buyers to ascertain the information they need about your business; this is essential. Include the business potential, it will allow a buyer to envisage what they will benefit from acquiring your business.

 

A prospective buyer will perform their due diligence on your business – if you exclude any important information, a potential buyer will find out. Being open and honest is the best way to sell your business

 

For a free market appraisal contact us on 01522 246811.  

 

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.

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.

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!

Visions, Missions and Technicians

Visions, Missions and Technicians

It’s been a while since I have written a blog, New Year, New Resolutions and all that, hmmm I also don’t really see the point in writing for writing’s sake. However, I thought it was about time I put pen to paper so to speak and let you all know how things are going here at Franchise Resales.

It’s hard work! Anyone who says running a business is easy is lying, 6 months ago my fellow directors Julie, Dave and myself sat down with one of our Account Managers and our mission was to thrash out a great plan for growth. A plan to create and implement a service that no one else could come close to. It’s now over 3 years since Julie and I took the reins of Franchise Resales, it was our vision to make us the number one Resales broker in the UK. We already had an established customer base and a great reputation within the franchise sector. However, we want to be the first company that Franchisees and Franchisors think of when they decide to sell.

We have grown from being a small part-time, run from home business, with a great reputation, to a business with 14 members in the team and a Head Office in a prestigious location. We have doubled in size with regard to the businesses that we deal with on a month by month basis. This has meant that we had to change a few things, firstly our communication with our customers both existing and new had to radically improve. We live in a world where we often get what we want immediately, with this in mind we needed to up our game. So, we decided the best way to do this was to add a new layer to our model, and introduced the Relationship Manager role. This means exactly what it says, manage relationships with our customers.

This role gives our Relationship Managers Patricia and George, complete autonomy to speak to customers when they want to be spoken to. It’s not a 9-5 job when you are dealing with a client’s livelihood. Another one of our aims was to be more transparent in our service offering. We are soon going to be launching our monthly marketing reports, which will enable franchisees to see, exactly what we are doing for our money. Finding buyers is easy, we are constantly inundated with people who want to take over an existing business. However finding quality buyers, who will pass the stringent criteria that we set in discussions with our franchisors is a completely different story.

So, with our new structure in place, we continue to grow from strength to strength, we are happy to say our team is able to handle the growth with complete confidence and our customers will get amazing customer service. Don’t get me wrong, I’m not saying it’s happened overnight, it’s been really challenging trying to implement new processes and procedures for staff to follow, not to mention implementing a new CRM which has been a nightmare. But we are now finally starting to see it all coming together and it’s amazing. We have a fantastic team that work brilliantly together to ensure that the job gets done and the customer is kept informed every step of the way.

Last but not least, we have changed the roles of the Directors playing on their strengths ensuring the business will continue to develop and evolve. Dave is and always will be our Finance Director, over the last two years he’s really come into his own juggling this with semi-retirement and being an Account Manager. Julie has stepped into the CEO role and will concentrate on the strategic aspects of the business, whilst I have taken on the Managing Directors role and with that comes the overseeing of the day to day business. It’s working really well and we can only go from strength to strength – Bring it on!!!

What will 2018 bring?

What will 2018 bring?

As the year comes to an end and we reflect on the last 12 months in the franchise world it’s clear that times are changing, both in the economy and the way that we shop. The internet is playing a huge part in our decision making and buying process. Who would have thought that a company like Toys r Us could have problems with sales at Christmas? More and more we are using the internet to research then buy online, especially if it’s not something we need to touch and feel or try on.

Since Brexit was announced and article 50 triggered, there has been a dramatic slow down in growth. With businesses in most sectors reporting missing target expectations, we are seeing the slowest pace of expansion in 11 months as well as a fall in inflation and the pound dropping to an all-time low.

We believe this has had a significant effect on business in the franchise sector. We certainly have had a quiet year to date, and many franchisors have also felt that this year has been a particularly quiet one in terms of new franchisees starting a business. However, we have seen business significantly pick up in the last couple of months.

Despite the uncertainty that many feel, we have seen some fantastic businesses come to market and we are pleased to report that prospect enquiries have picked up in the later part of the year. This we feel is indicative of some exciting changes we have made within our business, we are very excited to see what 2018 will bring.

So what’s new for 2018?

We are always looking for ways to provide a better service to our clients. This year we have welcomed new members to our team as well as made changes to some job roles. We now have two relationship managers, George and Patricia, who aim to build and maintain excellent relationships with franchisors, franchisees and prospective buyers. As well as facilitate the relationship between the buyers and the franchisees and franchisors. We have a new sales support Ellie who is busy supporting the team and learning about the franchise sector. Add to all this our newly formed, dedicated marketing department, and you will understand why we feel that this has made a dramatic difference to the support that the team can give to our clients. We are very excited and eagerly looking forward to having the best year yet in 2018!

What’s new for you?

Whether you are thinking about starting your franchise in the New Year or ending your journey, one significant thing you must consider is your exit. Planning for a return on your investment (exit planning) is a crucial part of business.

For those of you who are embarking on your journey into franchising, no matter whether it is a new start or a resale, knowing what your end goal is will allow you to set targets and measure your performance. Your ability to realise a return on your investment will depend on your ability to grow the business.

For those of you who are ready to cash in your chips and realise that return on your investment in the New Year consider this,  did you have an exit plan from the start or are you only now thinking that you either want or need to sell your business? As a franchisee who has built a business, there is a personal attachment, so it’s a good idea to seek professional advice from a resale specialist who can objectively value your business.

If you think you might be ready to sell your franchise in the New Year why not book a free valuation. This can help you to see whether your business is worth what you want for it. Or, we can advise you on what to do to get your franchise in a better position to sell.    

Whatever your plans are for the New Year we wish you a healthy, wealthy and happy 2018.

Ripe and Ready - Is your business ready for sale?

Ripe and Ready

Is your business ripe for the picking? Autumn is in full swing; the weather is changing, and we are beginning to prepare for the festivities of Christmas and New Year. As the year draws to a close we start to think about what the New Year will bring. If you are thinking about a change, possibly selling your business, why not find out how much it may be worth.

A third-party review will help you find out if your business is in a position to sell. By seeking professional advice, you can find out how much your business is worth. Not only will you have an idea on the value of your business. They will also give you advice regarding changes you may need to make, to increase your attractiveness to potential buyers and improve your chances of getting a higher price.

Before you can sell your business, you must ensure that your accounts in order. Most potential buyers will want to look over at least three years of accounts. Having this information formally laid out will show the buyer how the business is performing. The better your accounts look, the more likely you are to create a favourable impression. If nothing else a review of your accounts could highlight areas where you could improve and therefore create a more attractive opportunity.

The next step is to ensure that your business structures and processes are in place. Be sure that all your employee roles are clearly defined and that signed contracts are in place. All documentation concerning contractual arrangements should be in order, including property leases and supplier information. This shows a potential buyer that the business is organised, and gives them confidence that nothing surprising will crop up once they have purchased the business. The more organised you are the smoother the transition will be.

One of the most important factors to remember when deciding to sell is to keep growing the business. In order to achieve the best return on investment it must be in the best possible condition. It can take on average 12 to 18 months to sell, so even when it is on the market, you must keep your foot on the pedal. It is crucial to keep this in mind when deciding on the right time to go to market.

Selling a business doesn’t happen overnight. If you think in the not too distant future you might think about selling, it is important to make it’s as attractive as it can be to a potential buyer. Whether you are certain you want to sell or are just thinking about selling contact us today on 01522 246811 and we can discuss getting your business ready for market.

Why is a franchise resale a resale

After a fantastic month at Franchise Resales and a great National Franchise Exhibition at the NEC, we have been following up on lots of excellent conversations and introductions. After some conversations, it became clear that there are many people who do not understand or have negative feelings towards a business on the resale market.

Many people have an opinion that a business on the resale market must be performing badly, possibly in trouble. Why is the business on the resale market? There are many reasons why a business might be up for resale. The most common reason is retirement. A franchisee who has worked in their business made it successful and now wishes to get a return on their investment. Many franchise resales are in a fantastic financial position and just require a new owner to carry on where the previous owner left.

Another common reason for a resale is ill health. When a franchisee experiences ill health or needs to spend more time looking after a family member, they may have no option but to sell their franchise business. This means that the sale is reluctant but necessary.

A change in family circumstances, possibly relocation, sometimes divorce can also result in a franchisee needing to sell their business. There are occasions when people are bored, it’s entirely possible that they didn’t understand the realities of taking on the franchise that they chose. If this is the case, the business may or may not be in a good position financially. However, if the business is not performing as well as you would like, the opportunity is there for an incoming franchisee to build on what the current franchisee has already done.

Another negative view that many people express is the price. Why do the prices of franchise resales vary so much? There are many reasons for this, the size of the territory, the type of business, how long the franchise has been running, and how many customers the business has. The equipment included in the sale must also be taken into consideration along with the location in the country.

Every business is different, and we treat each business as such. Even businesses within the same franchise network can have a very different value. When you take on a franchise, whether it’s a cold start or a resale, you must run the business according to the guidelines given by the franchisor. However, you can decide in most cases how big you want to grow.

You can choose to expand the business, for example beyond a one van operation and have multiple vans. Or you can simply remain a smaller one-person business. The choice you make ultimately affects the price you will get at resale.

A franchise resale is a fantastic opportunity, especially with the current economic situation. A franchise is already a safer option than starting a business from scratch. A franchise resale is even safer, not only will you get the relevant training from the franchisor, but you will also then continue to grow an already established business. Most franchise resales are financially sound businesses that are being sold for genuine reasons.

If you are interested in finding out more about buying a franchise resale or to inquire about the resales we have on the market please contact us on 01522 246811 or email info@franchiseresales.co.uk