Franchise Resales Available in the UK

Facts & Figures About UK Franchise Resales

Starting your own business can be an exciting and rewarding experience, but it can also be a daunting task. One of the biggest decisions you’ll face is whether to start a franchise business from scratch or buy a franchise resale. In this post, we’ll explore the world of franchise resales, explain what they are, how to find them, and why you might consider buying one instead of starting a franchise from scratch in a territory.

What are Franchise Resales?

A franchise resale is when the current owner, also referred to as the franchisee, sells it to a different buyer. This can happen for a variety of reasons, such as retirement, financial difficulties, or a desire to move on to another opportunity.

Franchise resales give buyers a unique chance to take over a business that has already built up a customer base and a source of income.

How to Find Franchise Resales?

Finding franchise resale businesses for sale can be a bit more challenging than finding new franchise opportunities. However, there are a few ways to find them:

• Check online listings: There are several websites that list franchise resales, Find My Franchise being one of them!
• Contact the franchisor: Many franchisors have a list of franchisees who are interested in selling their businesses. Contact the franchisor and ask if they have any franchise resales available.
• Network: Attend franchise expos and events and network with other franchisees. You may come across a franchisee who is interested in selling their business.

What Are the Pros of Buying a Franchise Resale?

Buying a franchise resale can be a great opportunity for those who want to start their own business but don’t want to go through the process of starting from scratch with an existing franchise. Here are a few reasons why buying a franchise resale might be a good idea:

Established customer base

When you buy a franchise resale, you will inherit a, hopefully loyal, existing customer base that has already been established by the previous owner. This can save you a lot of time and effort that would have been spent on marketing and building brand awareness.

Established Systems and Procedures

The previous owner of the franchise resale will already have well-established the systems and procedures that work well for the business. You can benefit from this by taking over these processes and avoiding the set-up phase that a new franchise owner would have to go through.

Immediate Cash Flow

Since the franchise resale is already up and running, you can start generating revenue from day one. This can be especially beneficial if you need to start generating cash flow quickly.

Easier Financing

When you buy a franchise resale, it may be easier to secure financing from lenders because the business has an established track record of turnover and profitability.

Reduced Risk

Buying a franchise resale can be less risky overall than starting a franchise from scratch in a territory, as you can see the track record of the business and how it has performed in the past.

What Are the Cons of Buying a Franchise Resale?

Limited Flexibility

When you invest in a franchise resale, you will have to operate within the systems and procedures that have already been established by the previous owner. This can limit your ability to make changes to the business to suit your own preferences.

High Upfront Costs

Buying a franchise resale can be more expensive than starting a new franchise from scratch. This is because you will be paying for an existing business that has already been established and has an existing customer base.

Potential For Hidden Issues

It is important to conduct a thorough due diligence process before buying a franchise resale. There may be hidden issues with the business that the previous owner has not disclosed, which can lead to unexpected expenses and challenges down the line.

Examples of these could be that the previous franchisee hadn’t run their business as they should or organised it properly so you could be having to undo bad practices or reputation.

Limited Growth Potential

Since the franchise resale has already been established, there may be limited opportunities for growth and expansion. This can be frustrating if you have ambitious goals for the business.

How is it Different from Buying an Existing Non-franchised Business?

Buying a franchise resale is different from buying an existing non-franchised business in a few ways:

• Brand recognition: A franchise resale gives you access to an established brand, which can make it easier to attract customers. A non-franchised business may not have the same level of brand recognition.
• Training and support: As a franchisee, you’ll have access to training and support from the franchisor, which can help you run the business more effectively. A non-franchised business may not have this same level of support.
• Operating systems: Franchise resales come with pre-established operating systems and procedures which have been tested and proven by the franchisor. A non-franchised business may not have the same level of systems in place.
• Royalties: With a franchise resale, you’ll have to pay royalties to the franchisor, which can eat into your profits. With an existing non-franchised business, you won’t have to pay royalties, which can help you save money.

Conclusion

Buying a franchise resale can be a great alternative to starting a franchise from scratch. As an investment, it offers reduced risk and an established customer base.

It’s important to research and conduct due diligence before making a decision. It’s always best to consult with a franchise solicitor and accountant to help you navigate the process.

It’s also worth noting that buying a franchise resale is different from buying an existing non-franchised business, but both have their pros and cons.

Understanding the differences between the two can help you make a more informed decision.