Pip Wilkins, CEO of the UK’s standard’s based BFA (British Franchise Association) asks those who have sold their businesses and finds out what makes a profitable franchise exit.
The health of the UK franchise industry isn’t in doubt. According to our latest survey, sponsored by NIC Local, franchising contributes £19.1 billion to the UK economy. It’s clear the sector is thriving — but what happens when it’s time to sell?
Franchisor sale – TaxAssist’s MBO rewards franchisees threefold
In 2014, John Westgarth, the founder of TaxAssist Accountants wanted to retire. He had built the business he’d founded in 1995 to a very impressive 190 franchisees with an income fee of more than £30 million.
In a franchise sector first, the MBO (Management Buy Out) that followed, didn’t just contain members of the managerial team, but unusually, franchisees as well. Eventually the buyout saw TaxAssist owned 32% by franchisees, 53% by the senior management team and 15% by long-standing external business partners.
Fast forward to 2025, the firm is now 50% owned by franchisees, has grown to 270 franchise locations and has increased the network income fee to well over £70 million.
Franchisees who initially invested in the MBO have seen their investments triple in the intervening period, through the growth of the brand’s franchise networks, the development of new service lines and the development of group activities.
Daren Moore, the current CEO said: “All of our franchisees have the opportunity to acquire shares in our group, and many take up this option. Based on feedback we know that this additional connection is important to them as it gives them access to all aspects of our business and significant influence on the decisions our Board makes on their behalf. They can also see an opportunity to make a significant return on their investment, with an established internal marketplace allowing them to sell their shares whenever they want to.”
Franchisee sale – Rob Wilson exits Minster with six-figure deal
When Rob Wilson bought his Minster Cleaning Services franchise 34 years ago, his territory encompassed the whole of Essex and, unsurprisingly, he built a very successful cleaning business. Rob was turning over £2.6 million a year with approx. 250 clients when he sold the business in 2024, for a very comfortable ‘six figure sum.’
Managing director at Minster Cleaning Services, Mike Parker said: “We help on average 3-5 franchisees a year to sell their businesses. We work with them to help them prepare the business and will sometimes use an external franchise resale agency to find the right buyer. We use the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) financial metric, to evaluate a business’s operating performance and offer the business for sale at approximately 2.5 – 3 times the annual profit.’
On preparing the business for sale, Rob says: “I made sure I had steady turnover growth, continued profitability, a widespread customer base with secure contracts, a stable staff structure in key business areas and a marketing plan to ensure new enquiries, with an active pipeline.”
His advice to someone considering buying a franchise now, with the long-term goal of eventually selling it when they retire is: “select a franchise which has good long term growth potential by sector and by franchisor. Be prepared to work extremely hard initially and build a team of people who can grow with you and the business. Ensure you are correctly financed from the start and make sure your bank is supportive of your growth plans.”
Franchisor sale – From hurricane loss to global success: Water Babies’ story
Paul Thompson had moved his young family to the Caribbean Island of Dominica, where he hoped to become a diving instructor, but not long after arriving, disaster struck in the form of a hurricane and the family lost everything, forced to return home to the UK, penniless.
Back in London, stay-at-home dad Paul oversaw taking his daughter to swimming lessons; he subsequently became a swimming teacher, saw room for improvement in the business model, and eventually launched Water Babies.
At the point of sale, 23 years after launch, Water Babies was teaching 80,000 babies a year, through a network of 70+ franchise outlets and 600 teachers across the UK, Ireland, Canada, The Netherlands and China.
Paul sold the business to Elmsley Capital and Westerly Group, for an ‘undisclosed amount’ which, in his own words, allowed him to ‘change many people’s lives.’
Paul’s advice for any franchisor thinking of selling their business is: “Selling a franchise takes at least 3-5 years of planning. You need to prepare the business, be hitting your profit levels, have the right infrastructure in place and have a good track record of everything going well. If you’re the founder like me, you also need to detach yourself from the business, so the buyer knows you’re not integral to its success. I never met the people who bought Water Babies until the deal was done. They were buying my team; not me.”
Franchisee sale – “Planning ahead put my buyer in place 10 years earlier”
Just last month, Dougie Borland sold his Lanark Autosmart franchise after 16 ½ yrs and says: “Franchising is a fantastic sector, if you choose the right franchisor. I’m selling up now at 56yrs old, because my wife and I want to enjoy our retirement while we still have the energy and health to do so.”
He advises long term pre-planning to find the perfect buyer: “Ten years before I sold my business, I mentioned it to a former client. I advised him to build up £20 – 30k in liquid capital, so when the time was right, he’d be able to proceed. When I told him I’d decided to retire, he was in a financial position to proceed because I’d sewn that seed a decade before. He’s a great guy and I’m happy that the business is in a safe pair of hands, while I go off and play golf and travel the world.”
Pip Wilkins summarised: “These case studies perfectly demonstrate that franchising can reap great rewards when the time to sell comes, as long as the right preparation is in place. To learn more about buying a franchise or franchising your business, visit www.thebfa.org or sign up to one of our free online information events.”
