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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

* unhappy staff – staff with personal problems etc.

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

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

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

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

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

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

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

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

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!

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

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

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.

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