Resales

It is always difficult to put a value on a franchise when it is being sold. The valuation basis of most franchises is a multiple of future maintainable earnings. If a business has future maintainable earnings of $150,000 and a multiple of 3 times, the business is worth $450,000 ($150,000…

The basic premise of franchising is that the good will is, and remains that of the franchisor. The franchisee trades under the franchisors licence, brand and system. The franchisee is granted a licence (a contractual right) to operate the business under that brand and system. The goodwill at the end…

By Tim Kilham, Lanyon Partners Chartered Accountants As a generalisation, my view is that people selling businesses ask too much for the businesses and as a result people buying businesses often pay too much for businesses. In the ideal situation you would like to be one of those buyers who…

The best time to sell your franchise business is shortly after renewing the Franchise Agreement, while you have a reasonable term left. If there is 2 years left of your franchise term without knowing the franchisors position you have little to offer a buyer. Franchise Agreements can be for all…

The following steps should be taken when you looking to sell your franchise business: Plan to sell your franchise business, do your homework and seek expert advice from a specialised franchise lawyer and your accountant before you sell. Identify the risks and costs of your business. Don’t accept the first…

Before commencing the process of selling, ensure you take into account the cost and exit fees so they can be factored into your negotiations with a prospective buyer. The costs of selling can be considerable and include: business agents fees and advertising; landlords costs to approve the incoming franchisee and…

Buying a franchise resale in Australia is becoming more and more popular as it is often seen as a safer option to starting your own business from scratch. There are many advantages such as: It’s an existing business with and established customer base, and a local reputation Starting from scratch…

You have to bear in mind that when you buy a franchise resale in Australia it can sometimes cost you more as you will be buying the goodwill of the business. You will still have to do your homework when purchasing a resale, even if it looks a sound profitable…

Though there are many differences to buying a new franchise versus buying a franchise resale, the research into both opportunities should be as thorough. Don’t be fooled into thinking that because a resale is an existing business that the research has already been done for you, this is a common…