Franchise Resales: The Advantages of Buying One

08/12/2017 10:20 | Buying a franchise resale

Franchise resales information

The British Franchise Association / NatWest 2015 survey, highlighted some impressive statistics which demonstrate the growing appeal of franchising. The franchising industry continues to contribute to the UK economy with a rise of approximately 46% in the last decade to an incredible £15 billion. Now with over 44,000 franchises operating on our high streets providing employment to an unbelievable 621,000 people, and showing no signs of slowing down.

As the market has developed in the last 10 years, franchise resales have also increased. This is due to franchisees deciding to sell on their businesses for several reasons. The most common motives for moving on are significant life events, deteriorating health, retirement or simply feeling the time is right to embrace a new challenge. Whatever the reasons, this leaves an increased amount of franchises to buy which are already established and, hopefully, generating a profit.

So, what are the advantages to buying one of the many franchise resales on offer?

Franchise Sales UK: Youre buying into an established business

Franchise resales are a fantastic opportunity for new franchisees as much of difficult and stressful foundation building for the business has been completed. Someone else has already dedicated blood, sweat and tears to getting the business off the ground and its now most likely in a stable position primed for growth.

As the business will have been running for a while, a ready-made customer base is probably already in existence. Successful franchises can acquire new customers through brand recognition and nationwide advertising, and retain loyal customers by offering a consistent, tried and tested service.

This is a huge advantage of buying franchise resales. A lot of the ground work has already been done so the worry of finding new customers is removed because theyre already there and waiting.

Compare this to starting an independent business and the marketing costs can be huge. Raising awareness of the business and building a loyal customer base takes time, money and effort.

The concept has already been proven

When considering franchises to buy, an existing franchise business has the added benefit of a proven track record and brand reputation. This may come at a cost, with franchise resales typically requiring a higher capital investment than a new franchise. But if they are among the successful franchises that have been trading profitably, then the extra investment can be worth every penny.

Banks also look favourably on an existing business if funding is needed to finance the investment. This is because more accurate financial projections can be produced using the previous franchisees figures and forecasts; so, the uncertainty of whether a business will be profitable or not is removed to some extent.

For the franchisee of a resale business, hard work still needs to be put into the franchise to ensure that these predictions are realised, but having more than a rough idea of how much income can be generated is very comforting for inexperienced franchisees.

The business is ready and waiting to start

Resales are great franchises to buy if you just want to crack on with running your business as soon as the franchise agreement has been signed. With an existing business, many of the fixtures, fittings, stock and customers all come part and parcel of the sale.

As well as many physical elements of the business being in place, very often the people who work within the franchise are part of the deal too. If the franchise being bought has been turning over a profit previously, then the chances are that there will be a strong team of employees already in place.

Not only will keeping existing staff in the business save the time and money involved in recruitment, they will more than likely be trained and knowledgeable. This is a massive plus point and improves continuity for regular customers whilst the transition of ownership takes place.

The fast pace that franchise resales can get off the ground can be quite overwhelming. But rest assured that the training that the franchisor provides will prepare you for running a successful business, and they are always on hand to offer ongoing support if needed.

You can focus on growing your business

With employees, suppliers, processes and customers all in place as soon as you buy the resale franchise you can focus on taking it to the next level. Many of the operational aspects of the franchise will be in place enabling time to be spent considering future plans for the business, rather than on the here and now.

Being able to take more of a strategic view of the business will allow you to recognise its strengths and weaknesses which can be difficult if youre starting from scratch. This holistic awareness of the business enables a much more informed plan for growth and expansion to be developed.

A resale can also give you the chance to become one of the successful franchises much more quickly compared to a new franchise, or even an independent business. When a business is started from scratch, the set-up costs can be substantial, however, with most things in place in a resale business, profit is able to be made more quickly as less initial investment is required.

So, if youre keen to become a profitable franchisee, then its time to stop looking at franchise resales as someone elses cast off, and instead see the opportunity that it can offer. A faster route to profitability with an established and proven business model whats not to love?

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