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Melbourne, Australia

Resales

How to value your franchise for sale

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…
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Who owns the goodwill?

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…
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Is the cost of the franchise realistic?

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…
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Selling a franchise business

There is no point buying a franchise without an exit plan. Some franchisors even make this early training of franchisees so they are more rigorous and aware of what is needed to build a good business ready to sell. Some franchises are hard to sell A franchisee business may still…
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Advantages to buying a franchise resale

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…
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Investigating a franchise resale

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…
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Legal advice for buying a franchise resale

When purchasing a franchise resale you will not necessarily receive the same disclosure document from the franchisor as you would normally receive if you were a new franchisee. As you will be purchasing a franchise resale, you will be assuming an existing agreement without modification. The franchisor may not necessarily…
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When to sell your franchise

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…
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Steps to selling your franchise

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…
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