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Read our latest blogsFranchise Resales outperforms overall economy (26/04/2013)
At the end of April this year the Government announced that the growth rate achieved by the UK of the past 12 months had been 0.6% with the last financial quarter just scraping in on a positive note to avoid the "triple dip". During that same period, from April to March 2013, Franchise Resales has grown by over 50%. Another indication that the franchise sector outperforms the overall UK economy every time. We are of course delighted to have grown Franchise Resales by 50% and look forward to continuing this trend by working closely with our franchisor clients over the coming year. One factor that has contributed to our success over the last year is the growing realisation that a successful franchise resale requires diligent planning and management of the process involved. Many potential sales which are unmanaged simply drift and the fall apart with resultant potential acrimony between franchisor and franchisees and dismay for the prospective purchaser. It is possible to hold a sale together even against the odds if all parties are fully informed about what is happening and are comfortable with the process involved. Smooth successful resales are about the gentle management of people (both sellers and purchasers) and their expectations. This is why Franchise Resales was established and why so many prospective purchasers and sellers speak to us.
Whats all the talk about resales (30/01/2013)Just about every magazine or website on franchising these days has at least one article or section on franchise resales. What makes so many people interested in buying an existing business rather than starting with a new opportunity? Why, according to research, are over a third of all new franchisees that sign up with franchisors doing so through a resale opportunity? Assuming there is an opportunity to acquire an existing business in the area you want with the franchisor in which you are interested what would be the key reasons for and against buying a resale? In favour of resales are the clear factual arguments; the business already exists so there is a customer base from day one. This also means the business is trading so there will be cashflow from day one and if there are staff involved in the business – not always of course – they should know what they are doing and so you will be able to focus on absorbing the detail of the business and driving it forward. Against resales will be initial finance as, usually, a resale business will be more expensive than simply signing up for a new location/territory with a franchisor. That said it is important to balance the additional cash requirement to feed the cashflow as you grow a new-start from scratch and contrast this with the existing trade and higher purchase price of a resale. Above all when considering a resale, and you surely must consider one if it is available, it is essential you receive the full information. This is usually in the form of a Prospectus of Sale and it will provide all the background to the business, details of any property involved, staff and the costs of any equipment. The Prospectus should also contain details of financial performance, ideally over the past three years, and copies of the accounts supporting the figures. The final element is to ensure the asking price has been arrived at independently so it is not wildly skewed from the true business valuation. It always helps to have a dedicated person or an organisation to manage the entire resales process, assist in negotiations and coordinate the legal completion of the sale.
Christmas Decisions (21/11/2012)The festive season tends to be a time when most of us are able to stop, re-charge our batteries and take stock of "our lot". For some the December / January period is a purely religious time, for others this is less the case but either way most of us try to spend some time available with our families and friends. The simple act of slowing down not checking emails or possibly locking away the Blackberry or iPhone provides a mental breathing space and time away from the relentless drive of the rest of the year. Time to think, time to ponder, time to muse and wonder what if……….….. For many their thoughts turn to being free of the shackles of direct employment and the potential open to them of running their own business – the adrenalin driven excitement of being in control of one's own destiny though this may be tempered by an instinctive fear of failure. It is this balance of a drive for independence against a natural mitigation of risk that focusses more and more people's minds on the UK franchise sector and the wide array of opportunities available. It is unlikely you would be reading these jottings if you were not thinking about franchising and most people who investigate starting a franchise will also consider the acquisition of an existing one – a franchise resale. The inherent strength of a franchise resale comes from its very existence. It is there already, the hard work of establishing it has been done, the business is known in the local area, any staff and premises required are there and most importantly there is cash flowing into the business from day one; all you need to do is take your enthusiasm and drive it further ahead. Franchise resales occur in all types of franchise network. They usually occur when the existing owners want to move on, relocate, retire or occasionally when circumstances force them to sell. Most franchise resales become available for positive reasons and all present an opportunity to prospective franchisees to take on an established operation. Currently Franchise Resales has has franchised businesses available on this site for sale at prices which range from £15,000 to £975,000. Brands which are as varied in operation and price range as Ecocleen, Signs Express, Dyno-Rod, Jaspers Corporate Catering, Envirocare Grounds Maintenance, Cafe2U and Minster Services. See the Buy a Franchise Section for more detail. Almost every type of UK franchise is able to supply a franchise resale. Business to business, business to consumer, premises based and home based operations all come up for resale at some time or other. But how does one choose, what is the best approach to take? As a prospective purchaser looking for a resale you are best advised to adopt a twin track approach. Not only look at the details of the particular resale opportunity that has attracted you but also the franchisor itself. Buying a resale is still joining a franchisors network so there are two separate pieces of investigation to undertake. Yes you will be looking at the specific resale but you should also diligently investigate the franchisors offering in exactly the same way as one would when looking at a new "greenfield" business with them. The franchisor will still be your long term business partner once your acquisition of a particular business is complete. Initially you may not get much information because neither the seller of the business nor the agent helping them sell their business, will not know anything about you and will require a confidentiality agreement to be signed before releasing detailed information. Having signed a confidentiality agreement however the floodgates should open and a fully structured Prospectus of Sale or Information Memorandum (different people use different terms) should be provided. A properly prepared prospectus you provide you with all the information you require to firstly decide if the particular business is right for you and secondly to enable you to form a view of the value or price of the business. A prospectus should contain an overview of the business, what it does, where it does it and a summary of how it works. The size of the territory the franchise covers and the business demographics. A section should detail the financial performance of the business including supporting accounts. Any property involved in the resale should be fully detailed. Details of any staff involved including headline terms of their employment (within the bounds of personnel confidentiality). A list of owned assets and any hire purchase or lease agreements involved in the business will complete the picture for you. All of the above, together with the franchisors general information pack will provide a total overview of the business and will enable you to authoritatively assess the opportunity and decide if it is the one for you. Franchise Resales Ltd has all this information readily available and is able facilitate the entire sales process for you including introductions to franchisors, funding provision, business planning and coordination of the final legal process. Taking time to consider the future and taking the positive step towards a business of your own can be scary but will be that much less so with a well-structured franchise resale – something to ponder perhaps? Complete our enquiry form for more infomation. Enjoy the festivities - when they arrive.
Franchise Exhibition (04/10/2012)Franchise Resales are once again delighted to sponsor The Franchise Resales Pavilion at the NEC based National Franchise Exhibition on Friday 5th and Saturday 6th of October. The Franchise Resales Pavilion (stand B90) is the place to go to find out why, acording to the 2012 NatWest/bfa Survey of UK Franchising, 66% of all people who recently joined the UK Franchise Industry did so through the acquisition of an existing business. (See previous articles in this blog area for details). There are seminars throughout the two day event covering all aspects of franchising and of course the reasons why so many people start their journey into a new business future with an existing franchise. Franchise Resales are the only organisation in the UK that is solely dedicated to the resale of existing businesses - we focus on both purchaser and seller to obtain the best win-win situation for all parties. prospective purchasers can discuss their requirements with Franchise Resales and obtain solid, constructive advice based on years of experience within the UK franchise sector. Drop in to the Franchise Resales Pavilion at the National Franchise Exhibition at the NEC.
7 out of 10 buy a resale (31/07/2012)From the 244 franchised systems that were operating 28 years ago to the 929 reported in this latest NatWest/bfa survey of UK franchising 2012 the franchise sector has performed well. Yes there have been the ups and down of recessionary periods but now with £13.4 billion in sales delivered by 40,100 franchised units employing 594,000 people this is an industry that should be proud of itself. Bucking the national minimal growth trend for the UK as a whole - franchising is up 8% on last year. Now with the industry maturing the interest in the resale of existing businesses is continually growing. The survey indicates a change in ownership of 7.3% last year and shows franchisors predicting an increase in franchise resales to an average of 4.5 resales for each franchised network. Aggregated together this indicates an estimated number of resales for the year ahead to be 1,830 – clearly a figure in which Franchise Resales Ltd will have an interest. One of the key reasons we established Franchise Resales in 2007 was to provide this precise vehicle to allow resales to happen where franchisors were not providing a resales service themselves. Now with a team of six and a system that provides a resales solution for all levels of franchised business that wish to sell and move on we are only too pleased to provide advice and guidance. The UK economy seems to be constantly depressed - or is that just the depressing comentators in the media - but overall the NatWest/bfa survey of UK franchising 2012 shows the franchise sector thriving with an average growth of 8%. Now is the right time to get on board and buy a franchise resale.
Franchising the safer Option (04/07/2012) This continues a flat performance of the economy for the past three or four years with the growth rate swinging between a little growth and a little contraction. In fact we have to go back to the year 2000 to see a growth of much over 1% in a given year. Generally we all understand that it is currently a difficult period for business and, up to a point, we go with this thought. Looking further afield the economy of India (one of the fast growing BRIC nations) grew at a rate of 5.5% and even then analysts expressed shock it was less than they had expected. Other BRIC countries, that were predicted to be spearheading the world's growth, have all slowed down. Typically the country's growth rates reflect our combined levels of optimism. They tend to track our personal expenditure and our business spending tendencies and commitments to purchase and expand. If we are not confident we do not invest or spend as much. If cash is tight we keep it close. With a commercial environment such as this it seems illogical to consider buying a business. With the economy flat where will the growth come from? How could it be considered a sound investment? Where can I get serious growth potential? How does a growth rate of 8% sound? How about an industry sector that has consistently outperformed the UK economy every year – that is the UK franchise sector for you. Franchising in the UK is still on the up. The NatWest /bfa 2012 survey of UK franchising has shown, once again, that franchising is alive and well and thriving near you.
Franchising Surges Ahead (11/06/2012)The latest survey by NatWest and the British Franchise Association (bfa) shows one sector is more than playing its part in re-balancing the economy. While other sectors have struggled, the franchising industry has punched well above its weight over the past year in key areas such as growth, job creation and export. While UK GDP grew by 0.7% in 2011, the franchise industry increased economic contribution by 8% as turnover rose to £13.4billion. While other sectors contracted over the year, 9 out of 10 franchise businesses posted a profit over the year – reducing loss-makers to pre-recession levels. Further growth is likely as 76% of those surveyed expect business to improve in the coming months (compared to only 44% of all SMEs). Most (80%) believe that franchising gives them a competitive advantage over other small businesses as they have the support of a larger brand. In contrast to a UK-wide rise in unemployment of 180,000 in 2011, a total of 73,000 jobs were created in the franchise industry. This comes as the number of franchising systems operating right across the UK increased to 929, with 40,100 franchise business units employing 594,000 staff. The number of larger franchise units employing more than 11 staff increased by 30% in the past year according to the survey. Graeme Jones, Head of Franchising at NatWest and RBS, said: “The franchising model offers the benefit of appearing to be a larger business, standardised products and quality expectation – advantages all heightened in a downturn. Expectations for growth are high in the sector and we’ve invested in the largest specialist team of managers of any bank to ensure it happens. Brian Smart, Director General of the bfa, said: The last few years have put crippling pressure on businesses, creating some of the toughest trading conditions that many have ever seen. However, yet again we see the franchise sector proving its value by generating new sustainable business start-ups, jobs and revenue for an economy that desperately needs them. For those who are considering franchising this is obviously an encouraging sign, but we also stress the importance of thorough research and consideration before making any commitments. Strong export activity for goods and services may also have helped franchising weather the economic downturn better than most, with one in three already trading overseas. Franchising also looks to be setting the pace for future export growth, of those non-exporters, 38% plan to do so in the future compared to only 22% of SMEs not already trading abroad.
The perfect franchise (21/03/2012)There are these largish white birds that can be seen flying around our coasts or occasionally further inland. Big white birds also flock around recycling facilities and the like but none of them are Seagulls – Seagulls don't exist. These big white birds maybe Black-Backed Gulls, Common Gulls, Black-Headed Gulls, Herring Gulls, Terns or even Kittywakes but not Seagulls – Seagulls don't exist. Why therefore do we group this totally diverse group of birds into one non-existent group? Probably we do this because it is easy to do and possibly easier to understand – a form of shorthand. This does however have the ability to confuse and disguise the fact and detail. Interestingly it is this same shorthand process that many people follow when it comes to franchising. I have lost track of the number of times I have been asked at exhibitions, at seminars or via our website; "What is the best franchise?" or "what is the right franchise to buy?" Generally enquirers are lumping all franchised opportunities into one amorphous group of franchised businesses. Just like the non-existent birds we call Seagulls there are a vast array of differing options available within franchising. Each franchised business is designed to provide a different opportunity. This is both in terms of potential return on your investment and also designed to draw on the specific skill-set you have evolved during your life so far. Even within the same business sector the detail of the businesses differs. Some may have a business to consumer bias whilst others, offering the same broad product range, are business to business based. Some franchised businesses could be described as "job replacement" opportunities and these would include single unit man and van businesses. Others, offering multi-unit businesses could be described as management or even investment opportunities. The best franchise therefore is the one that most fits a prospective purchasers aspirations, needs and skills they have developed. Each person will have a different view of 'best'. No one sector of individual franchised brand is best and personally I would strongly advise against simply buying into a franchised business because you like the product. A prospective purchaser needs to see beyond the recruitment hype and drill down to the nub of the business opportunity. A purchaser should compare the requirements of the business to their own particular and personal set of skills. They should see just how much the business they are investigating can generate for them in terms of returns on the required investment. Whether it is a man and van business or a multi-site concept it is still just as advisable to carry out the research. In my view one of the most effective ways to do this is through buying a resale of an existing business. Buying a franchise resale is something that was done by 7 out of 10 purchasers of franchises during the last two years, according to the bfa/NatWest survey of UK franchising. With a franchise resale you can see what it is you are getting. There are facts and figures, there is a business that can be touched, felt and investigated. There is cash flowing through the business so the launch will be that much easier as the business is already trading and known within the local marketplace or community. With a franchise resale you are getting on a moving train – everything is running and all you have to do is grow it. So there is no best franchise, no ideal franchised opportunity only the one that is right for you. Just as there are no such birds as Seagulls.
10 Golden Rules (11/03/2012)Derrick's 10 Golden Rules – for franchisees looking to buy a franchise Decide on your investment level and stick to it. Play to your strengths Simple is good Follow these and you won't go far wrong.
Steps to buying a franchise (18/01/2012)Selecting which franchise to look at can be a daunting task; and that's before you drill down to the specific two or three opportunities to investigate in detail. Surprisingly some prospective purchasers simply pick a brand and location then 'go for it'. Whether this is based on interest in the sector or brand, a view that the sector is doing ok, gut reaction or meeting a bloke in a pub it is probably the most risky route to take when deciding on a business investment. Taking on a franchised business is a wonderful opportunity to take your current daily routine and your lifestyle off in a different direction. Possibly turning an interest into a business or simply doing something different – franchising can do this for you if you approach it correctly. This is possible because the franchisor will train you in the operational aspects of the franchise and provide the systems and support that give you the opportunity to develop your own successful business. Taking pot luck, going on instinct, gut reaction or listening to a 'nice man' is, in my view, not the best way to proceed. The first step is to consider your investment level. Business is mostly about finance so that's the place to start with your thinking. Decide on the total amount you are willing to invest into your new venture – including bank funding. In doing so, rather than popping into your local bank for a chat, speak with the specialist franchise units of the bank and if your particular bank does not have a franchise unit then speak to one that does. For details of where to contact these go to the website of the British Franchise Association www.thebfa.org and under Help and Advice you will find the franchise units of the banks listed. The look at your skill set, especially the transferable skills you have developed throughout your life that most of us take for granted. Skills like persuasion, leadership, motivation or analytical thinking. All of these can be gained though our hobbies or interests as well as within the workplace, so think laterally here. Now consider the industry sector that interests you. Business to consumer such as Food, Retail, Direct Sales, Personal Coaching, Residential Cleaning or Home Services etc. Business to business such as Signage, Commercial Cleaning, home based Consultancy Services or Business Support Services. Combining the above three points you are now set to start investigating the greater detail. The internet is usually where most people look first followed by magazines such as Business Franchise but both of these research methods are impersonal and remote. Franchising is about people doing business with and being supported by people and the very best way to start therefore is face to face at a Franchise Exhibition. At an exhibition of franchised opportunities you can speak to franchisors directly, comparing them 'side by side' and obtaining instant feedback if the business concept is for you or not. There is a raft of exhibitions of varying sizes throughout the country. The largest by far is the National Franchise Exhibition at Birmingham's NEC, usually in October. Others are in London, Manchester and Glasgow with many local franchise shows in key towns around the country. Exhibition entry is usually free and with so many available are the logical places to start your research. What your discussions with industry experts will also show you is that by buying an existing business you can not only enter the more secure world of franchising but can do so with the knowledge that the business has been successful in that location or territory before. Buying an existing business (a franchise resale) gives you cashflow from day one – an important consideration in these challenging times – brand presence in the local marketplace and customers. All these combined with thorough research and investigation will combine to give you the opportunity to develop a solid business for your new future.
New Year (03/01/2012)
HAPPY NEW YEAR On behalf of the whole Franchise Resales team I wish you a healthy, happy and prosperous New Year and we look forward to being able to assist you in sourcing your ideal resale business opportunity in 2012. Derrick
Why is the BBC always so half empty (25/11/2011)I spent a day at the Franchise Suppliers Showcase Exhibition meeting a selection of Franchisors who were looking at the services on offer provided by ourselves and other key suppliers to the industry. During the conversations I held with around 60 individuals I asked them how their franchise was performing. Were they still recruiting, were the franchisees growing - all that sort of stuff. I wanted to see just how bad it was out there. Whilst nothing in business is ever easy and the recent recession was hard to get through, Franchise Resales came through well and we are now selling more and more existing franchised businesses than ever before. I wanted therfore to see what everyone else in the franchise community was feeling given the total gloomy message put out by the Beeb every evening. To see if it was just us that was bucking the trend or was it actually OK out there and the negative spin was simply from broadcasters who can only think half empty thoughts. Everyone I spoke with said someting along the lines of "I know it is bad out there and some businesses clearly must be suffering but we are doing OK. We would like more, naturally, but our franchise is holding up well. We are recruiting, franchises are growing etc, etc." It is only anecdotal but my point is that franchising is alive and well and growing in the UK. The UK franchise sector is taking on and launching new franchisees every day, boosting our economy, providing employment and in some places taking people off the unemployment register. Initiatives such as the Franchising Works project in Greater Manchester is doing just that - taking people from unemployment and providing opportunities to operate and own their own franchised businesses. The recent Franchisee of the Year Awards (sponsored by HSBC and supported by Express Newspapers) demonstrated just how succesful UK franchising is. I was on the judging panel of the awards and we interviewed a whole array of franchisees over two days, each with a successful story to tell. It would be good if the BBC and others stopped focusing on the downside and the negative in society and covered some of the success stories that are out there driving the revival of the UK economy.
Double Dip Recession or Not (03/11/2011)Just when it feels like the whole recession thing and its attendant worries are behind us and we can all loosen the purse strings again, the commentators start to talk about a second round of recessionary woes, a double dip. It was back in 1985 that the FT journalist Chris Sherwell used the rather unflattering term a “dead cat bounce” to describe the effect of a pseudo recovery before seeing the economy slipping again. The concept being that even a dead cat will bounce if it is dropped from high enough – it doesn’t however mean there is any life in it. The generalisations about our economic activity both here and in the world generally misrepresent the thriving franchise sector within the UK. Yes some specific sectors within UK franchising have suffered but overall the industry is weathering the swings and roundabouts well. Certainly the number of enquiries being received by franchisors is increasing and the successful National Franchise Exhibition at Birmingham’s NEC is testament to a strong interest in this dynamic business format. Franchising is resilient in difficult times because it is systems based. Franchising works because it has tried and tested systems and concepts that are shown to be successful over and over again. The more times a franchised concept has been operated the greater the chances of the next opening continuing this success. Many well known franchised brands embody this principle. Mail Boxes Etc, Signs Express, Rainbow International, Minster Services, GreenThumb, Metro Rod and many others are all long term franchised brands that are well established, well proven and stable. When investigating a franchise opportunity you will be seeking a balance between the level of your investment, the system and support this buys you, the returns you are likely to make from running the business and your ability to sell it on to a future new owner or pass it to the next generation. The balance between all of these can be tricky because they are so diverse. This is where taking your time and speaking to existing franchisees within the particular brand will pay dividends. The more you can find out before signing on the dotted line the better but no matter how much research you do the final decision to buy into a franchise or not has to be yours. It is your investment, you will be running the business and therefore no one else can take that step but you. You may believe the gloom merchants that all is woe and doom so sit and do nothing. Or you may take the view that now is the right time to take control of your future, invest in your skills and abilities and buy into a franchise. We may be encouraged to envisage dead cats bouncing all around us but I believe this is just the time to look to your future and take that step with the purchase of a franchise resale; there are many good opportunities just waiting to be snapped up and developed.
National Franchise Exhibition (27/09/2011)Once again, Franchise Resales is delighted to be part sponsors of the National Franchise Exhibition at Birmingham's NEC on Friday 30th September and Saturday 1st October. The Franchise Resales Pavilion, which is stand B180, has experts on hand to discus the pro's and con's of obtaining a franchise by buying an existing business. Aditionally I will be speaking on the subjact on Friday at 14:00 and Saturday at 13:00 in the seminar theatres. For a free entry ticket please email info@franchiseresales.co.uk See you there
Franchise Resales Expansion (25/08/2011)I am delighted to announce the appointment of Julie Taylor as an additional Account Manager with Franchise Resales and the opening of a new Regional Office in Lincoln. Julie’s appointment brings the number of Account Managers at Franchise Resales to three. She joins Tony Mundella and Gordon Cutting in the task of delivering successful resales on time. It also reflects the ever growing interest in resales and level of enquiries we receive. The number of resales in process is also on the increase so Julie’s appointment provides us with the ability to grow further as demand for our service increases. Julie comes from a background based in sales, negotiations and training. For the past 10 years she has been involved in high profile franchisors operations. Most of her franchise focus has been in franchise recruitment and support. From a background in negotiations and franchising Julie is a natural fit in Franchise Resales. The new East Midlands office provides meeting facilities and a call handling facility where we also welcome Heather Johnson to the team as the first point of contact for most prospective purchasers. Our main office remains at Wassell Grove in Stourbridge for all administrative and accounts. Now in our fifth year of trading Franchise Resales is reaping the benefit of the upturn in interest in the purchase of existing businesses. The unique “end to end” management and support process we provide to both sellers and buyers sets Franchise Resales Ltd apart from the run of the mill business brokers. As franchise specialists we bring years of experience (more than we collectively wish to count) to the task of achieving successful franchise resales.
7 in 10 buy a Resale (15/07/2011)Seven out of ten people that joined the UK franchise sector within the last two years did so through the purchase of an existing franchised business – a franchise resale. Seven out of ten people have made the decision to buy a resale rather than start with a greenfield location. Seven out of ten have understood the strength inherent in a resale purchase over a new start-up. Seven out of ten is the statistical result stated in the bfa/NatWest Survey of UK franchising recently published and carried out by BDRC Continental, the leading market research organisation. This finding confirms our own experience within Franchise Resales Limited where we have seen an ever growing interest in everything to do with the franchise resales process since our launch in 2007. From Exit Planning Seminars for franchisee conferences to the management of the resales process and delivery of individual franchise resales – the whole slant of the franchise industry has moved towards the process of delivering successful franchise resales. Whilst being delighted by the rapid growth in franchise resales, it really is not that surprising when this seven out of ten statistic is further analysed. Nearly 9% of franchisees changed ownership last year and over half of the franchisors in the UK expect to have franchise resales available during the current year. Again this is not surprising when 33% of all franchisors have been in place for over 10 years and therefore have long term franchisees within their networks. This means their franchisees will be considering their own futures, planning their own exits and the bfa/NatWest survey indicates that 47% of all franchisees have plans in place for their exit and resale. It makes sense for existing franchisees to consider their final exit from their particular network. Any business must plan and prepare for its future and the very best are run and operated as if they were 'always for sale'. 95% of franchisees surveyed reported their business as being in profit so there is clearly going to be a potential market for future purchasers. It could well be that next years survey will indicate an even higher percentage take up of franchise resales by new franchisees. So why the interest? Why this growth in franchise resales? Why seven out of ten? With a franchise resale business there is; All of this is already in place for you to take over and drive onwards. The franchisor is there to provide training and support, assist with your launch and provide hands-on advice, just as with a new-start franchise. With a franchise resale however the business is also already there and waiting for you to inject your energy and drive to take it on and unleash its future potential. So how do you, as a potential purchaser, find out if resales are available in the area in which you live or to which you can travel easily? The simple answer is to speak to the franchisor of the particular brand and ask. Many franchisors do not openly publicise the resales which are available within their system so unless you ask they may not tell you. Most people who enter franchising are not however initially looking for a specific brand but are actually seeking an opportunity which uses their skill set, which they will enjoy running and which will generate the income they desire/require. Very few are totally fixed on a specific brand, maybe not even a specific sector and in my experience most prospective purchasers will move towards an opportunity which fits the majority of their requirements. The bfa/NatWest Survey shows that the main two reasons that purchasers of franchise resales selected the particular one they did was firstly because of the successful current performance of the business they were investigating and the second reason what that it has growth potential. Seven out of ten are unlikely to be wrong.
Buy and existing franchise (16/06/2011)Buy a business - buy a franchise - buy an existing franchise True entrepreneurs are rare indeed. Those who create an original concept, nurture, develop and take it successfully to market are thin on the ground. Clearly they are out there and some have created world renowned brands but the majority of new start ventures are, regrettably, destined to fail. Surveys show that 80% of new start businesses cease trading within 2 years –scary fact or what! People seeking to own a business these days are more often than not likely to explore the opportunity of purchasing an existing business than launch a new one. These enterprisers, rather than entrepreneurs, see the clear benefits of buying an existing business. Existing businesses have cashflow from day one. Existing businesses have brand presence and are known in the marketplace. Existing businesses will have an infrastructure already in place and operational – staff, premises, stock, vehicles etc. All the processes and procedures ready in place for a new owner to take over and develop further. It is possible that an existing business may require a higher level of capital to acquire it, though not always. New start ventures however are hugely cash hungry and one of the main reasons new ventures fail is they simply run out of cash. On balance therefore the final total cash requirement of initial capital plus on-going working capital may be a similar amount for both. Obtaining funding for each type of business however may be different. Launching a new venture means convincing a backer, usually the main banks, the business concept will actually work and you are the person to develop it and drive it. With an existing business your prospective backers can see the previous performance of the business and so the lending decision is that much easier and straight forward. The advantages therefore of acquiring an existing business over launching a new venture seem to stand out as they logical way to go. Extending this thinking further, buying an existing franchised business gives double the security for a purchaser. It is a well-researched fact that franchised businesses are more secure and less likely to fail than stand-alone businesses. The latest NatWest/bfa survey of franchising shows a growing £12.4bn industry in which over 90% of franchisees surveyed stated their businesses were profitable. The UK franchise sector has grown throughout the recession at a rate of 15% since 2006 compared to UK GDP growth during the same period of only 9.4%. Franchises are successful because they provide a tried, tested and replicated operating system that enterprising people follow and exploit to grow and develop their own businesses. This means that when a franchised business becomes available for resale a prospective purchaser can look at it with more confidence, and possibly less scepticism than looking at an independent business for sale. A franchise resale has been operated in the franchisors method of working. When a purchaser buys the business they will be trained by the franchisor in that method of working and so will be able to assimilate themselves into the business quicker and smoother than with an independent. Additional help, technical back-up and just having someone who knows how the business operates at the end of a phone or email gives extra comfort and security. When investigating the purchase of an existing franchise, you will be provided with a detailed prospectus of sale often called an information memorandum from the franchisor or, if they have outsourced their sales process, this will be provided by Franchise Resales Ltd. This provides a detailed description of what exactly is for sale, the territory involved, the staff (if applicable) the premises (if applicable) and of course the financial performance. Most franchisors will validate the sales turnover figures for you which also gives confidence though will be unable to verify the operating profitability. The franchisor will however be able to provide a template cashflow illustrating what their franchises structure should look like so a purchaser can compare and contrast this to the business they are considering – a big plus over an independent business. When considering setting up a business it makes sense to buy one that already exists when compared to the risks involved establishing, funding and launching a new venture. Taking that thinking further a franchised business provides a greater level of security than an independent and the purchase of an existing franchise, with all the back-up and training provided by the franchisor, makes perfect logical sense as the route to your enterprising future.
(01/06/2011)
More successful resales (31/05/2011)Our third Mail Boxes Etc franchise completed the sales process last weekend and now Allan Grantham has taken over the reigns at MBE Southampton. We wish him every success for the future. At the other end of the business size scale, the sale of Plan-it Cards in Sheffield & Doncaster also completed. The levels of interest in resales as the best way of entering the franchising sector are increasing all the time. Clearly there is a recognition that with a trading business already in place a franchise resales makes good sense as long as all the information about the business is made available to you - which of course it always is when the business is prepared and presented by Franchise Resales Ltd. More businesses for sale are being added to the "Buy a Franchise" page on this site all the time.
Franchise resales - the main way to enter franchising (25/05/2011)This is clearly a demonstration of what we have been advocating for several years that to buy a franchise resale is a logical way to establish a business. Brand presence, cashflow and clients in place from day one. The report states, A cycle is now established with units having been successfully set up and run for several, if not tens of years and passed on to new franchisees. It is a sign of a maturing industry. Indeed, a third of all franchisees are now running re-sale units. Some franchisor systems may have reached limits in their expansion offering new franchisees no choice other than to opt for a resale. Franchisors are predicting that over 1,600 resales will take place this coming year as franchised networks start to mature. The report goes on to state that from the information provided over 2,000 of UK franchises changed ownership last year with many selling to realise their investment or to move on to retirement. That would indicate to us that the projected level of 1,600 resales in the year ahead may be conservative. Here at Franchise Resales we have seen a strong growth in the numbers of enquiries received and have successfully completed sales of many more franchises in 2011 so far than in 2010 so the positive trend continues within UK franchising.
Franchise Survey Results (23/05/2011)These are some of the key points from this years NatWest/bfa survey Turnover for the industry rose by £600m last year, a 5 per cent increase on the previous 12 months.The number of companies franchising their operations in the UK also increased to 897, 6.5 per cent higher than the previous year and 15 per cent up on 2006. The fastest-growing sector for franchising is catering, including restaurants and fast food outlets. For example, Domino's, the pizza delivery service, has more than 650 franchised outlets in the UK. It increased its UK sales last year by 19 per cent to £485m and created 1,700 jobs. Total employment in the UK franchising industry rose by 56,000 last year to 521,000, and nine out of 10 of the franchises interviewed for the NatWest and BFA research were profitable. The average franchise employs 11 people. So it seems the industry, at least at the headline level, is doing well. We in Franchise Resales also saw an upturn in business which is continuing through into 2011.
Cost Reduction (19/05/2011)A new article by Derrick Simpson is just published in Franchisor News On-Line. Here Derrick discusses the logical approach to outsourcing elements of the franchisors processes to experts therefore releasing key members of the team to focus on brand development and franchise support. Read the full article here.
Bargain franchise opportunity (09/05/2011)Due to a change in the owners personal circumstances this fantastic resale is presented for a swift sale and priced accordingly. Kall Kwik in Maidstone has been trading for 20 years and is currently taking £250K in profitable sales. Now moving on to pastures new this summer the current owner is offering his busineses for sale for only £79,995 which is far less than the cost of establishing a new Kall Kwik Centre. The business is priced in this way to attract a swift purchase. To be a succesful Kall Kwik franchisee you must posess good people and business to business sales skills, the rest is training and support from this well established franchisor. If this suits you and you are available to act quickly please complete the contact us form and we will call you directly.
Resales success (05/05/2011)May saw not only the launch of our new website courtesy of the design skills of James Wark at Local Life Designs (hope you find it useful and interesting - if not tell us) but also the completion of yet another franchise resale. Minster Services in Warrington has been sold successfully using the Franchise Resales process and now has a new owner driving the business forward once again. There does seem to be an upturn in the levels of interest from both purchasers seeking an existing business opportunity and also franchisees wishing to sell and move on. This has been a trend since the beginning of the year and hopefully this will continue. New franchisees joining existing businesses is a true win win situation. The seller gets to capitalise on their investment and the purchaser takes over a running business with cashflow from day one. For details of other businesses for sale see our Buy a Franchise page or drop us a line at info@franchiseresales.co.uk and we will call you to discuss your requirements.
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