The Lazarus Financial Group has assisted many franchises and purchasers in the resale process...we can do the same for you!
Buying an Existing Franchise
Some of the reasons for a franchisee selling their business might be as a result of... The franchisee being very successful and wanting to sell a profitable business. He or she may simply be retiring. Or, they might have decided that the type of franchise is simply not for them, and wish to pursue another career.
Buying an existing franchise doesn't have to be a daunting task, it can be a great alternative to starting a business from scratch. The resale option usually comes with established premises, an exclusive territory and location that no other franchisees can encroach on, an existing customer base, and experienced staff.
Over a third of all purchasers of franchised businesses today did so by buying an existing business. The reason so many people are opting for a Franchise Resale is that with an existing business you can expect to receive:
Immediate Cash flow
Existing Customer Base
Local Brand Recognition
A franchise resale is not like "buying a pig in a poke". The buyer will have a managed transaction with franchisor training, full details of the business, its history, accounts and a realistic asking price. All the ingredients needed for a smooth and successful purchase.
Benefits to Buying a Franchise Resale:
- The franchise resale is already in operation. "Open for Business"
- Can save time and money by averting the regular franchisee process
- Established revenues and immediate cash flow from day one
- There is less risk involved with the same name recognition and brand awareness.
- Possibility of buying an undervalued franchise, if the franchise owner is eager to sell.
- Owner financing may be available from seller of the resale franchise.
Some Franchise Resales We've Represented
10 Tips For Selling A Franchise
- Let the Franchisor know that you are planning to sell out - Many franchisors have rules regarding a franchise for sale. They will have criteria that the buyer must meet, and may assist in the sale.
- Make sure your Franchise unit is prepared for the sale - Check the building and equipment, make sure the records for the franchise are in order. The financial records should be accurate, as the sales price is usually based upon profits, and those profits must be proven to potential buyers.
- Know why you are selling - This is one of the first questions a potential buyer will ask. Make sure that your reason for selling won't have a negative effect on a potential buyer's decision. Poor sales, or problems with the franchisor, are not good reasons to give a potential buyer.
- Price your franchise to sell - Keep in mind that what the business is worth to you - in terms of emotional value - may not match what the franchise opportunity is worth on the market. Be prepared to negotiate if needed. Check with your franchisor to find out how much other franchise resale have sold for, but keep in mind that location and profits are major pricing factors.
- Know your options for selling - Before you sell a franchise, you need to know what options you have. In some cases, the franchisor will help you sell the franchise. If this is not the case, you can either sell the franchise yourself, or go through a business broker.
- Advertising for a Franchise Resale - If you are using a Business Broker, first, find out who they are, and how & where they plan to advertise your business for sale.
- Know your ideal buyer - Checked with your franchisor about any special qualifications that a buyer must meet. Knowing the type of buyer that you are looking for will help you save time by weeding out those who do not meet the qualifications.
- Confidentiality is important - Employees, customers, and vendors are usually not made aware of the owner's intent to sell, until the sale is almost complete. Too many people assume that if a business is for sale, it is on the verge of bankruptcy. This hurts a business. Since the sales price is dependent on the profits a business brings in, it is important that you demand Confidentiality from Brokers and prospective Buyers.
- Plan your sales presentation - Having a business broker helps in qualifying potential buyers, arranging tours of the business, answering questions as to why you are selling, the demographics of your market place, information about the franchise system, annual profits and losses etc.
- Offer assistance to your buyer - Offer as much assistance to the potential buyers as possible. Help them complete their application with the franchisor. Make a deal to help them run the business for a specified period of time after the sale. Knowing they won't be left on their own, will often comfort a potential buyer to go through with the sale.