Franchise Resale Opportunities
Jump into franchising with a pre-established, already trading franchise business. Franchise resales become available when the previous owner of a franchise territory decides to sell their business and move on. A franchise resale usually includes an existing customer base which means you can be earning very quickly. The cost of franchise resales tends to be higher compared to setting up a new territory, because the previous franchisee has already spent a lot of time building the business up. As a result, benefits can usually be seen from day one.
What Are Franchise Resales
The term “Franchise Resale” is given to a scenario where the franchisee of a particular franchise territory is looking to sell the business and move on. A change in the franchisee’s circumstances might mean that they make the decision to sell their franchise business to someone else who is looking to take over. The franchisee’s business continues to operate normally, with an existing client base. Franchise resales offer a complete, turnkey solution to buying a franchise.
The franchisee will ask for a sum of money in exchange to the keys for the business. This will usually be around the total investment of the business including franchise fees and equipment costs, but sometimes more depending on the business’s reputation and presence.
Types of Franchise Resales
A franchisor usually won’t buy the franchise territory back from the franchisee. It is, in most cases, up to the franchisee to sell the territory to another franchisee. The franchisor will help with marketing and promoting the resale, but selling the business depends on another franchisee purchasing the business. Because of this, pretty much every franchise territory will be listed as a resale at some point. Many well-established franchises do not offer new franchises. If their territory map is already complete, the only way of entering their business model is via a franchise resale. Maybe a franchisee is selling to retire, or medical issues, or change of career, or chooses not to renew the franchise agreement. There are many reasons for a franchise resale.
Franchise Resale Benefits
The main benefit of a buying an existing franchise territory is that you’ll not only be buying the rights to trade under the franchisor’s brand name, but you’ll also be buying the assets, the customers and the equipment of an already-trading business. Where local area marketing costs time and money, and can take a while to gain traction (as if you were starting up a new territory), with a franchise resale, you’ve got:
- A list of trusted, valuable customers that may either have scheduled your services, or are a regular client for repeat income
- A series of partners or contacts, for example event companies or corporate companies who are your clients
- Local contacts for marketing the business
- A team of employees who assist with the running of the business
By buying a franchise resale, usually you’ll have the above right away. The investment can be quite big, but so can the rewards!