Coffee Shop Business Owner

Don’t Dismiss Franchise Resales If You’re Looking to Buy a Business for Sale

Highlights

  • Franchise resales are similar to independent business resales, except they’re part of a franchise network.
  • Franchising offers many benefits, from support to proven, trusted brand and buying power. With a franchise resale, you benefit the same as any other franchisee.
  • The differences in asking price between a franchise and independent business resale won’t be vast. Often franchising benefits outweigh those of an independent startup. Could a franchised business resale work for you?

Are you looking to get into business ownership? Whether you are on the balance between starting up a business from scratch, and pursuing the acquisition of an already-trading business, franchised business resales can be a strong choice.

Thanks to an established brand and powerful framework of a franchise business model, franchising is an ever increasing choice for entrepreneurs, ticking many boxes that people look for when getting into self employment.

It’s easy to overlook or dismiss franchising when it comes to getting into business ownership. Not everyone is aware of the concept of it, at least initially. Franchise resales are a type of business for sale which are part of a franchise network. Franchise resales, just like any other type of business, can be sold into new ownership. When it comes to getting into self employment, there are a few routes you can go down, from partnerships to going it alone. Franchising remains a solid choice for both new entrepreneurs and existing business owners, thanks to not only its proven brand but also its structured framework that holds potential for further growth.

Don’t Dismiss Franchising for Self Employment

If you are just starting out with the prospect of getting into business ownership, being hit with investment figures and ongoing royalties can be a huge put-off. But in many cases, they’re well justified. In the instance of a franchise resale, sweat and toil have gone into developing the business for the area up for sale. An existing customer base and brand have been built up and more often than not, the asking price justifies the value of the business. The same applies to independent businesses for sale. If you’ve spent years building up a business with a turnover of £150,000 plus per year, you will want to get the best price for your efforts.

Investment for a new franchise usually covers equipment and tools of the trade. For a run from home franchise, you can expect to get a fully established business presence both online and in local media. For a retail business like a restaurant or shop, the investment covers fit out with access to approved fitters and suppliers.

Don’t dismiss franchising as your next career path. With access to an established brand, powerful reputation and knowledge & support of a franchise network, franchising provides the tools to empower you to thrive.

Buying an Established Business for Sale – What’s Available?

Buying an existing business is a great way to dive head first into running a business that is ready to make money. You get access to all of the tools of the trade needed to run the business. The existing owner will provide you with any training and support you need when taking over the operation. Buying an established business, there are a few different kinds of businesses for sale. Two major examples are standalone businesses and franchise resales.

Standalone businesses are independent businesses not part of any franchised brand. They have been built up by a previous owner; it could be a family run business or single owner. An independent business should have connections with partners and suppliers who provide goods and services, such as produce, shop fitting, maintenance and any other business-related services. Regardless of whether you buy an independent or franchised business resale, there should already be a system in place for continued operation and day one turnover. Unless, the existing business is closed down temporarily.

Franchise resales are similar to independent businesses, in that you are purchasing an already established setup ready to run, ready to profit from. The only difference is that the brand is part of a franchise network. You become part of a family, a family of franchise owners. You will pay ongoing fees (often monthly) to the franchisor, in exchange for continued access to the brand, and:

  • Ongoing support, from the franchisor or head office
  • Benefit from access to partners and suppliers with potentially better offering or reduced prices when compared to an independent business (better buying power)
  • Better brand awareness and a reputation built up thanks to the franchise’s brand name
  • Operations manual and continued R&D to help you drive the business to further growth and success

Franchise resales and independent businesses will be priced similarly. Franchise or not rarely has any effect on business valuation and pricing of the business depends on underlying factors.

Standalone Business or Franchise Resale, Which Should You Choose?

When it comes to choosing between a franchised business resale and an independent business for sale, the differences are few. Ultimately your decision will come down to the one that aligns best with your interests. Franchising aside, all businesses for sale should be capable of providing good EBITDA and turnover. If not then you should take care before parting with any sort of investment, and i’ll explain the red flags to look out for in the next chapter.

Buying an independent business, you won’t have franchise royalty fees or ongoing fees to pay a franchisor. But you miss out on head office support, brand reputation, nationally established trust and national marketing campaigns. Many franchises, especially ones with many franchisees, use ongoing monthly fees to promote the franchise network as a whole. Through use of newspaper advertising and TV campaigns, money used from franchisees can be used to generate leads for you. National campaigns like this can hit harder than say a flyer in a local town magazine. Independent businesses wouldn’t benefit fully from this sort of media, affording it at an appropriate suitable Cost Per Lead may also be out of the question.

Both options enable you to take the reigns of a business already trading. One that is (hopefully) making healthy profit. If you are looking to buy a business in the UK, you should consider these factors:

Buy a Franchise Resale If…Buy an Independent Business If…
You feel you’ll benefit from support from the franchisor and bodies such as the British Franchise Association.You believe that the brand works well and already has built up a following of repeat customers. The brand should also have positive reviews so to garner new customers as well.
Other franchisees of the same brand are trading in surrounding areas. This will give your local presence a boost. Their marketing efforts may also contribute to your own growth.The business model is unique, or offers a USP that isn’t already tapped, one which is seeing demand.
You are a new entrepreneur or have limited experience within business ownership.You have plans to grow the business outside of the existing area or franchise it.
The business best aligns with your interests.The business best aligns with your interests.
Things like reviews, financials and proximity of the business to customers all play important roles in choosing the right business for sale.

Explore the Options Carefully, Look For Any Red Flags and Understand How Franchise Territories Work

There can be many reasons to sell a business. Good or bad, most business sales are due to retirement or owner seeking new adventure.

When considering a business for sale you must do a thorough accounts background check. Accounts will be available and you should check these over with an accounting expert. There are many partners within the franchising sector who can help you do this including franchise consultants.

Are you aware that franchises are often restricted in trading area? Unlike independent businesses, franchises are geographically restricted – at least most are. Most franchises split up their franchise territories by city, region or postcodes. Make sure you carry out due diligence when exploring any type of business opportunity.

However neighboring franchisees will have a positive impact on your business! Their presence will increase local brand awareness and will help drive more customers and sales in the long run. This is contrasted with independent businesses, where being found is often down to chance. Being a part of a franchise network means you’ll benefit from greater marketing and brand recognition. You’ll also have to spend less time researching and developing new products and services, and more time doing what you enjoy.

Interested in Becoming a Business Owner? Browse Franchise Resales at Franchise Planet and Find a Business That Works For You.

Browse all existing businesses for sale and franchised businesses looking for a new owner. Franchise or independent business, becoming a business owner gives you greater flexibility. You can scale your earnings with your ambitions and many businesses can be run part time. If you’re looking to get into business ownership (experienced or first time), why not consider franchising? There are over 1,000 franchises for sale in the UK.

Get into business for yourself but not by yourself, with franchising. Discover a world of franchises at Franchise Planet.

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