Franchises for sale
People considering becoming a franchisee are faced with a long list of wide ranging questions that need to be answered. One of the first questions is whether they actually have the right character to run their own business as a franchisee. If the answer to this is yes, then other aspects must be considered such as financial or legal matters or what kind of franchise they actually wish to run: a hands-on or management franchise, a home-based or a van-based franchise, from an office or from a shop? A fundamental question, however, that needs to be taken into consideration is the franchise territory itself. This in turn throws up a number of questions such as ‘What franchise area am I able to cover?’ ‘How big should it be?’ ‘Should the territory be organized according to my needs and knowledge? or ‘How do I actually find a suitable territory?’ .
For some franchise businesses, a franchisee should have good knowledge of the market he or she is intending to work in as well as an established network of business contacts. More often than not this is the area that the potential franchisee lives in. The next step is to find out what franchises are available. Potential franchisees can visit franchise exhibitions or other events to meet franchisors personally to discuss which franchises are for sale. Specialist magazines, for example, list franchises for sale. Another obvious source is the Internet. By entering the keyword ‘franchises for sale’ in a search engine, a long list of websites will appear offering franchise opportunities.
The first thing is to find out what is actually covered by the franchise for sale. Is it for an individual business or does it cover a whole territory? The franchise licence and other rights are normally included but it is advisable to look into what other costs are involved, such as whether the induction course fees are covered or not. When planning his franchise, a franchisor will decide how he expects his franchise network to grow. Some franchises allow several franchisees to set up in the same city or region so they find themselves facing competition from another. Others divide a country up into a number of exclusive franchise territories. Franchise opportunities or franchises for sale are, therefore, areas that are not yet occupied or not yet fully occupied. Obviously franchise networks that are still fairly new on the market will have a greater number of franchises for sale available than more established ones.
In some cases, potential franchisees may find that the franchise, he or she is interested in, is already complete. In such cases the only way to join the franchise is to purchase a franchise territory or a franchise business from a franchisee who is selling his business. Such opportunities are known as franchise resales. These, of course, have the added advantage that the potential purchaser can see the actual business figures, i.e. the turnover and profits, and so knows exactly how the business is doing on the market. The downside is, though, that this could make the franchise more expensive to buy if it is very successful. Again, here, it is important to see what is covered by the purchase price of the franchise resale and what additional costs need to be paid.
As with all questions, potential franchisees should examine the franchise for sale in detail. Is the franchise for sale large enough? Does the franchisee have to face competition from other franchisees? Does it hold sufficient potential customers for the business to be a success? Sometimes franchises for sale are divided up according to the number of inhabitants. If a franchise deals mostly with SMEs, however, then the number of businesses in that franchise for sale is of greater importance. These and other questions can be at least partially answered if a potential franchisee carries out detailed market research work in the area he or she is interested in.