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Buying a Franchise Resale

So you’ve decided that you are going to buy an established business rather than setting up a business from scratch. You are not alone in having this particular thought because more and more people are recognising that to take over an existing business then develop and build it makes a lot of sense when compared to the risk involved in starting with a new concept or idea.

An existing business has cash flow already, customers in place, staff (if appropriate to the business) and a brand presence.

Extending that thought process, it is only natural therefore that people seeking to acquire an existing business should consider an existing franchised business because doing so gives you the best of both worlds; an established business with a current cash flow etc to build upon and the security of operating a business where the success rates of franchising are well known to be higher than independent operations.

Most franchisors will have franchisees within their network who have decided they want to put their business on the market and sell. Some franchisors won’t openly advertise the locations that are for sale because most of their franchisees wouldn’t like it to be general knowledge they are thinking of moving on. They will however discuss them with you, confidentially, once you have passed the franchisor’s initial approval stage. You can then decide whether to opt for a new location or to take over one of their existing franchises.

Within the franchise industry business sales or transfers are known as “Resales”. This is because a franchisor has sold the location/territory initially and now the licence to operate in that location/territory is being sold-on to a new franchisee, hence the term “franchise resale”. In some more mature networks a specific location may be re-sold several times over as the various owners of that business have decided to capitalise on their investment and hard work by selling the business on to new owners.

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