Buying a franchise resale

Adquirir un negocio en marcha es una opción cada vez más popular, ya que permite aprovechar un flujo de caja existente, clientes fidelizados y un equipo operativo sin los riesgos de empezar desde cero. Esto te ofrece lo mejor de ambos mundos: un negocio establecido con ingresos comprobados y el respaldo de una marca con un modelo probado.

Las reventas de franquicias son comunes en redes consolidadas, donde los dueños venden su negocio para capitalizar su inversión. ¡Conoce esta opción y accede a un negocio rentable desde el primer día!

Why existing franchises are for sale

Una de cada doce empresas en EE. UU. es una franquicia, y se abre una nueva cada 8 minutos. Debido a este enorme mercado, la reventa de franquicias es una opción popular.

Comprar una franquicia de reventa puede ser una excelente alternativa si no deseas comenzar desde cero. Sin embargo, pagarás una prima (hasta el 30%) por adquirir un negocio con un flujo de caja probado, una base de clientes y un modelo de negocio exitoso.

A pesar de la prima, los beneficios son claros: cuentas comerciales reales, soporte y capacitación, y una transición más predecible. Es esencial verificar los números con el franquiciante y consultar con un contador.

Si el franquiciado actual tiene una buena relación con los clientes, considera un periodo de traspaso para facilitar la transición y asegurar el éxito.

Steps to buying a franchise resale

Al considerar una franquicia de reventa, es normal preguntarse por qué se está vendiendo, si el negocio es sólido y por qué es más caro que empezar desde cero. Estas son preguntas válidas, y tanto el franquiciante como el franquiciado vendedor deben proporcionarte respuestas claras. Es crucial realizar la misma diligencia que harías al comprar cualquier negocio.

Los elementos clave para una compra exitosa de franquicia de reventa incluyen verificar los detalles con el franquiciante y asegurarse de que toda la información sea clara y precisa.

Information

The selling franchisee must provide a detailed description of their business, including updated revenue and profit figures. This description covers the type of business being sold, with details about staff, equipment, and location. The information should also include the reason for the sale, and will help the buyer evaluate whether the opportunity is a good fit.

Valuation

The sales price of a business must be linked to its income. An informed franchisor will assist in this decision, but it is advisable to obtain an independent evaluation from a franchise specialist. Accountants apply an earnings multiple to determine value, although the valuation is not exact. This process provides a basis for negotiations.

Negotiation

Negotiations are essential and, although often challenging, must be amicable and based on mutual agreements. The buyer seeks to improve the performance of the business, while the seller wants to show the potential of the business. Both sides must be willing to give in on some points. The goal is to reach an agreement that benefits both of you.

Completion

Franchise resale transactions require legal documentation and the involvement of three parties: the seller, the buyer, and the franchisor. The latter has a legitimate interest, since it maintains the rights to use the name, logo and technical knowledge. Therefore, the franchisor must approve the terms of the contract ensuring that the conditions of the franchise are respected.

Advantages of buying a franchise resale

Purchasing a resale franchise offers several advantages, especially when compared to starting a business from scratch. Benefits include:

Immediate cash flow: The business is already generating income from day one.
Established brand presence: The franchise already has recognition in the local market.
Active clients: From the beginning, you have an already established client base. Infrastructure in place: Stock, personnel and properties (if applicable) are already organized.
Easier business planning: You can develop plans based on real business data.
More accessible financing: The proven track record of the business makes it easier to obtain credit.

To speed up a rolling ball as opposed to starting it from a standstill position is always the energy efficient option.

The above positive elements which demonstrate why a franchise resale would be a strong option to consider also make the opportunity attractive to secure finance for your new business. All businesses will usually require some form of banking facility and many will require additional funding most often in the form of a loan. If not a loan then, at the very least, an overdraft facility is usually required to support a level of working capital.

When presenting a structured business plan to a bank to secure these facilities, the strength of the proposal and therefore the likelihood of its being approved will, in part, depend on your business projections. With an existing business there is clear evidence of what has been achieved by the current owner, so projections can be based on fact and this will give considerable weight to the proposal. This in turn will make it more likely to be accepted because the previous revenue history and brand presence, plus your drive and background all combine with a franchise resale to make this option the logical route into franchising.

Why buying a franchise makes economic sense

Higher chance for success through brand awareness

Most franchise businesses, especially re-sales of existing locations, have a customer base that is loyal and comfortable with the pre-existing corporate image. Few people like to risk their consumer dollars on an unfamiliar company product or service. This is particularly true if and when a familiar franchise with similar qualities or prices already offers that value. This brand awareness creates the potential for higher sales and lower marketing costs, both factors that increase the likelihood of success.

Proven systems and standards in place

Franchises already have established methods of doing business. Through the test of time and competitive challenges, these systems are proven to increase sales and productivity. This lessens the guesswork, eliminates the lengthy learning curve, and reduces costly errors. In the end, these reductions mean more time for focusing on the true business at hand, customer service and satisfaction, higher sales, and higher profit margins.

Initial and continuing operational support

Throw the “fear of going alone” out the window! Franchise companies have professionals dedicated to ensuring that franchisees have the support to get started. Indeed, as part of their growing franchise family, your new membership means you will have experienced staff to walk you through the shaky moments, in the beginning and ongoing throughout the years, whenever you need assistance. You will always be able to pick up the phone and reach supportive members of the franchise family.

Training programs and reference materials

With operational support comes training programs to assist you and your employees with standards of success. Since the franchisor has a vested interest in raising positive brand awareness, your success is important. For this reason, franchisors offer ongoing training, the sharing of new, cutting-edge techniques, system upgrades, service enhancements, and product developments.

Easier access to financing

Since many businesses fail from undercapitalization, access to financing is important. Obtaining financing is much easier for a franchisee because banks recognize the business brand and model of most franchisors. Banks know they have a better chance of receiving payments with interest from a business with a proven model and support system in place.

Key considerations for buying a franchise resale

Reason for selling: Investigate why the franchisee is selling. Is it because of retirement, personal problems or future risks that could affect profits?
Review of accounts: Consult with your accountant to analyze the performance and audited accounts of the business. Make sure the business is profitable.
Price assessment: Compare the price with other businesses for sale in the region and calculate the loan recovery time.
Thorough research: Talk to other franchisees to get opinions on profitability and franchisor support.
Responsibilities: Make sure you will not be assuming the obligations of the previous franchisee and evaluate the employees you will take on.
Structure of the sale: Understand if it is a sale of shares or assets, as it has legal and accounting implications.
Sufficient capital: Make sure you have enough capital and a financial structure to invest in an established business.

Purchasing a resale franchise gives you a significant advantage in accessing an operating business, which can lead to higher profits from day one.

How to identify the best franchise resale opportunity

Finding the ideal resale franchise is not about choosing the most popular one, but rather the one that best suits you.

When evaluating a franchise, ask yourself the same questions you would consider if purchasing a new franchise. Remember that no two people are alike, so what works for one may not be right for you. Don’t go by any name or brand you recognize, as a big-name franchise like McDonald’s may not be the best option if you’re not interested in retail or a hands-on approach.

A franchise is only successful if its franchisees are also successful. Successful franchisors invest time and resources in selecting the right franchisees, as one can negatively affect the brand’s reputation.

The key question is: “What is the best resale franchise for me?” To help you find the right franchise, you should ask yourself the following:

Since you will be working long hours at the franchise, make sure you enjoy what you do. Make a list of your preferences and avoid franchises that don’t align with them. If you don’t like being in an office all day, opt for options that don’t involve it.

What do you like doing?

Identify your key skills: Are you good at managing people or selling? Would you like to work with clients face to face? Use your strengths to choose franchises where you can excel and where your experience is relevant.

What are your strengths and weaknesses?

Consider the work environment: Do you prefer retail, office, remote or outdoor work? Some franchises require you to be involved, while others allow you to manage remotely. Find the environment that motivates you the most.

What type of environment do you like to work in?

Make a list of sectors you would like to explore, such as food, real estate, beauty, etc. The advantage of franchising is that you do not need previous experience, as you will receive complete training on your chosen business.

What industries interest you?

Evaluate whether you prefer to work close to home or if you would be willing to travel. The location of the franchise is important, as it can affect your quality of life. Decide what is more important to you: the franchise or the proximity to your family.

Where geographically do you want to work?

Determine your budget, as it influences the franchises you can consider. Some franchises, such as retail franchises, require greater investment. If your budget is limited, evaluate low-cost franchises, such as work-from-home or mobile franchises.

How much money do you have to invest?

What experience is important when buying a franchise resale?

When purchasing a resale franchise, prior experience is not always essential, as franchisors prioritize certain traits over work experience.

Many franchisors prefer to teach their franchisees what they need to know, so a willingness to learn is key. Successful franchisees must be committed and motivated to make their franchise work.

They should enjoy the work as you will be involved for many hours. If you are not interested in the type of business, your performance could suffer. It is essential to be enthusiastic about the product or service being offered. Franchisors also look for people who learn quickly and can transfer that knowledge to their team, especially in franchises that require personnel management.

Additionally, they must follow the systems and processes established by the franchisor to ensure the success of the business. Management, customer service and sales skills are essential.

Do you want to be owner operator or absentee owner?

La decisión entre ser propietario-operador o propietario ausente depende de factores como las preferencias personales, la situación financiera y el tipo de franquicia. Aproximadamente el 25% de los franquiciadores requieren que el comprador sea propietario-operador, mientras que el 75% permite la propiedad ausente.

Algunas franquicias requieren una participación activa, especialmente si se necesita experiencia en el sector o una licencia especializada. Sin embargo, franquicias como restaurantes pueden ser gestionadas con un gerente experimentado.

Las preferencias personales juegan un papel crucial: si prefiere estar involucrado en la operación diaria y ofrecer un toque personal, la opción de propietario-operador es más adecuada. Si prefiere delegar responsabilidades, puede optar por ser propietario ausente, pero tendrá que gestionar revisiones periódicas para proteger su inversión.

En franquicias de reventa, el nivel de participación dependerá de cómo el vendedor manejaba las operaciones. Un buen equipo gerencial puede facilitar que sea propietario ausente, mientras que si el vendedor era el gerente, necesitará asumir ese rol temporalmente.

Franchisor support

While franchise business ownership isn’t for everyone, those who choose to pursue a franchised business model choose to do so for numerous good reasons, one of which is most likely the support that the franchisor provides to each franchise owner. A very common question that I have been asked countless times is “what kind of support can/should I expect from my franchisor?” Unfortunately, there is no perfect answer to this question, as there are a number of factors involved, including size and maturity level (age) of the franchise concept. For the sake of this article, we will consider a more mature brand with 75 or more franchisees currently operating. Below I have listed the most common support areas (not necessarily in this order):

Systems to allow franchisees to share best practices and ideas, solve problems, etc. (most franchisors have an internal website just for franchisees that accomplishes this)
National account management (if applicable) Corporate purchasing cooperatives and/or approved suppliers
Corporate purchasing cooperatives and/or approved suppliers
Social media coordination and support (national and local level)
Current operations manuals
Awards and recognition

Don’t be surprised or disappointed if your franchisor does not offer all of these benefits. The key is to make sure that the franchisor is meeting the most immediate needs of its franchisees while also prioritizing appropriately to provide additional services and benefits as the organization grows.