Buying a UK franchise business brings with it many advantages. New owners buy a business that is already setup and sell a recognised brand name. The only thing that remains is to run and market the business well. However, a franchise business-bought does not guarantee success. Here is a guide that can help you buy a franchise business for sale.
Investigate a franchise business for sale
Questions for the buyer How much does the franchise cost? How much money can be invested? Can the buyer bear a loss? How much finance is required? Is a cheap rate of interest available? Is there another source of livelihood to fall back upon if the business fails? Does running the new business require special skills and experience and does the buyer have them? Which franchise to buy -- a service or a retail outfit? How many hours can he spend daily? Is the buyer looking at a long-term business? Questions for the seller What is the royalty payable? Is it fixed or is it a percentage of sales? Is renovation required? Is the business in a satisfactory condition? Is there an obligation to pay into an advertising fund? What are the business controls? Are they restrictive and how? Have the franchisors asked for a design change? What is the restriction on goods and services that can be sold? Are there any restrictions on method of operation and sales area? What can constitute the cause for termination? What are the existing renewal clauses? Are there any new renewal clauses? What are the daily sales? What is the purchase cost? What are the operating expenses? Is there a demand for the product? How fierce is the competition? Are same or similar products available online at cheap rates? Can the business be resold easily (if the buyer is unable to manage it)? Can accounts be provided, including books of account for inspection? Questions for the franchisor Does the franchisor provide training support and development? Is this support onsite or offsite? Is the buyer picking up a well-known brand that is instantly recognised? Is the franchisor experienced and does he know how to franchise a business? Or, is he a new kid on the block? How long is the franchisor in the business? How many franchisees has he appointed? Are there any special laws that apply to the business? Is the franchisor tainted by litigation? Has his company ever been convicted of unfair business practices? Is there any litigation against franchisees?
Buying a franchise is like buying a company and running it. It is not easy and all aspects must be investigated before signing the best franchise deal. A lawyer's services are highly recommended.