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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.

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!

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!!!

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.

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.

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

Being a franchisor means being responsible for a business network and brand. The franchisor is ultimately responsible for the brand and the franchisees within. This involves providing the overall support and resources the franchisee needs to succeed as well as ensuring that the franchises are being operated to a certain standard. They are  responsible for training and recruiting new franchisees as part  of growing the franchise and brand.

So what happens when a franchisee wishes to move on?

The franchisor has the final say, however the seller also has a vested interest in what happens next. How do you protect your franchisees and do what is best for them whilst looking after your business and brand?

One of the best things you can do for your franchisees is to ask them to plan their exit. No matter if they have just started or if they have been with you for a number of years. The best protection for you and for them is an exit strategy. If a franchisee has these plans in place you can be assured that they are working towards an end goal and will be doing everything they can to create a successful business.

The exit plan is just the beginning of a franchisee exit. From the minute they decide to sell their business there are many decisions that need to be made.

One of these is who will be your new franchisee? This is your decision as a franchisor, you know what type of person you want to have in your network.

There are many factors to consider here: can the prospective buyer meet the financial responsibilities of the businesses after the initial purchase. It may be an established business they are buying however there are still ongoing costs once the new franchisee has taken over. The last thing you need is to find a great candidate only to find out they may not have the finances to cope with running a business.

Are they a strong leader? The overall reputation of your brand can suffer even if just one franchise out of many performs badly. You must be able to assess your prospective franchisees on their leadership qualities and experience in leadership roles.

Communication skills are also vital for your new franchisee, not only will they be expected to show excellent customer service skills within their new business they will also have to show they can communicate within the franchise itself. Communication is so important in business, for building relationships between franchisees and franchisors as well as between staff and customers.

Depending on their reason for selling and your relationship with your franchisee finding the right candidate can be a difficult process. They are still responsible for the day to day running of the business and may not have the time to vet all of the possible candidates, which will then fall to you. This is a waste of your time and theirs. Having the right candidate is so important. You will need to have a new franchisee who will push the business forward and make a success of it.

Whilst you are ultimately responsible for the franchise as a whole, the day to day running of the franchises is down to the franchisees, Ensuring that staff contracts are in place with clear roles outlined is something that should be done from the beginning, however it is essential when your franchisee wishes to sell and to ensure a smooth sale of the business.

The franchisee must also make sure that they continues to run the business effectively. This can be difficult during the sale of a business. They may not look as hard or have the time to scrutinise a candidate before passing them on to you. This can be frustrating for you and your franchisee.

You need the FR Factor: Protection for both you and your franchisees.

For your franchisees, deciding to sell doesn’t have to be a hassle. Our process will help them focus on getting their business into the best possible position to sell whilst we screen potential candidates and arrange meetings when we believe we have the best possible person to be your new franchisee.

One of the positives of our system is that it saves you time. You do not have to spend time going through an extensive list of candidates for the right one. We can help your franchisees plan their exit and when the time comes put that plan into motion.

We can help you to protect your franchisees which in turn protects you and your brand. We have over 150 years combined experience in franchise resales. We understand what you expect from your franchisees. We help your franchisees prepare their business for sale, point them in the direction of the right solicitor and banking contacts, offer advice on different aspects of the sale as well as helping your franchisees establish the right price and finding the perfect franchisee.

The most important aspect of your franchisees selling their franchise for them is getting the right price. The most important aspect of your franchisees selling their franchise for you is getting the right franchisee to take over and grow the business.

The upcoming National Franchise Show in Birmingham is the perfect opportunity for you to meet our team. Why not book an appointment and see how we can help to protect you as well as your franchisees. Call us on 01522 246811 or email marketing@franchiseresales.co.uk

 

When going away on holiday, it’s vital that you sort all the essentials. From having your travel documents ready and waiting, to packing clothes for all weathers, you need to be prepared if your trip is going to run smoothly. The same thing goes for selling your business- and particularly when you’re reselling a franchise. Whether you’re looking to retire from franchising altogether, or just want to make a fresh start with a new business, the easiest way out is to sell your franchise on to a new owner. That way, you don’t have to worry about winding down the business, or keeping one foot in running it. Instead, you’re able to ride off into the sunset, and enjoy the next stage of your life, hassle-free.

It’s not enough to simply put the franchise up for sale though, and hope that someone will come along and take it off your hands. You need to put some effort in to make the business an attractive proposition, so that buyers will be more eager to take it off your hands. By following the advice below, you’ll be able to ensure that you’re all set to kick off the selling process, so that all parties concerned- you, the seller, and the franchisor company- are happy with the way that things pan out.
First things first, you should ensure that all your bookkeeping is in order. That way, if someone wants to know just how well the franchise is doing, you will be able to give them a clear indication. If your franchise is running smoothly, then this will give you a much better chance of finding a buyer quicker. On the other hand, if your finances are in a mess, then a buyer might think that they are better off just going it alone. The bottom line is, make sure you can demonstrate in simple terms that your franchise is in a strong position, to attract as much interest as possible.

Another thing you’ll need to do is have a plan in place for your existing staff. If they are going to stay on, then this will also make the sale easier to negotiate, and will give the new owner less work to do. Instead of having to recruit and train a whole new team while learning the ropes themselves. They will be supported by an already strong team of employees who know how to run the business on a day-to-day basis. Of course, this might be tricky if, for example, the team is made up mainly of friends or relatives, who won’t want to stay on after you leave. In this case, it’s best if you frame the situation as a strong opportunity for the new owner to put their own stamp on the franchise, and run it the way that they want to.

Finally, make sure you’ve squared things with your franchisor before you formally begin the selling process. While many franchisors are happy for franchisees to pass the business on to a new owner, you will still need their approval first. They will likely also want a say in just who their new franchisee is, so that they can be sure their reputation is in safe hands. You’ll also want to be clear on their policies towards franchisees, although since you’ve already spent time running a franchise, you should already be familiar with this. Make sure you let potential buyers know just how things work in regards to the agreement with the franchisor, so that they can easily tell whether yours is the type of franchise that they are looking to get involved in.
Contact us today and plan your get away. Call us on 01522 246811 or e-mail info@franchiseresales.co.uk.

There’s no doubt about it- reselling a franchise is tougher than it first appears. You might well have a stellar business plan and plenty of resources to pass on to your buyer, but just how do you go about finding them in the first place? Unlike selling a conventional business, the market for reselling a franchise is smaller, because many people do not always want to have to pass on a portion of their takings to the franchisor.

Selling a franchise also comes with some extra complications because it’s not technically your business that you are selling. You’ll need full cooperation from your franchisor in order to close a deal, and you’ll have to convince them that your buyer is up to the job. If you neglect this crucial point, then you could find that the deal falls through at the last minute, and you will then have to start right back at the beginning again.

What’s more, while you’re looking to resell your franchise, you will have to carry on running the business in the meantime. Naturally, that takes up a lot of time, and you might find yourself too exhausted to even contemplate hunting down a new buyer. In order to resell your franchise for the best price, you need to have it up and running at full capacity, so how will you find the time to conduct the selling process yourself?.

As you can see,  reselling a franchise can be an extremely stressful process, especially when you just want out. You will need to assess whether you have the time to run your business as well as searching for the right person to buy your franchise. If you decide to outsource the sale of your franchise you will get help through each part of the selling process. From getting an independent valuation to getting the ball rolling, to exit planning and due diligence, as well as getting the franchisor’s approval of the buyer. An external partner will aim to achieve the best deal for both sides, so that you get a fair price for your franchise and make a smooth exit from the business, and your buyer gets a franchise that’s already on a firm footing.

So, if it’s time for you to move on from your franchise to pastures new, We are here to help. With an extensive network of contacts, we make the reselling process as quick as possible. No one else in the UK offers the same level of service that we do, so you can be sure you’re making the right choice when you come to us. With connections to expert solicitors to oversee everything, we can help the whole process to run smoothly and efficiently. Don’t give yourself the extra stress of having to find a buyer yourself- thanks to Franchise Resales, you can focus on your future instead.