Selling your franchise can be key to new adventures, advises Dorian Gonsalves
It’s always gratifying to receive good news, and this month I was particularly pleased to receive a very positive email from a franchisee within the Belvoir Group who had successfully sold his business. This franchisee was so delighted with everything he had achieved during his years with us, that he had taken the time to thank the franchise support team for all of their efforts in helping him to sell when the time was right, so that he was then able to realise his assets and have the necessary funding to embark on the next stage of his life. If you are at the start of your franchise journey, and still researching what type of business and franchise you think you might like to invest in, I would also advise asking franchisors about their exit strategies, as this is certainly another key factor that is worth considering.
At Belvoir we have several franchisees who have been with the network for 20+ years. In fact, our very first franchisee – Andy Campbell, over in Belvoir Moray is still in business and doing well. Many others have also been with Belvoir since those very early days. Generally speaking, however, we find that the average time most franchisees choose to remain in business before deciding they would like to sell or retire is around 10-15 years. This tends to be the natural cycle of their franchise journey and is often the average time that someone remains fully engaged in the industry before deciding they would like to realise their assets to fund a pension or another new investment. It can prove to be extremely lucrative – a couple of years ago, our Belvoir Peterborough office sold for £1.7 million, and we have several other franchises that will be worth in excess of a million pounds when their owners decide to sell.
There are of course exceptions and some franchisees occasionally sell up much earlier. This is rarely because they are dissatisfied with Belvoir’s franchise business model, and much more likely due to a change in personal circumstances such as illness, family concerns or other unforeseeable life events.
For this reason, our Recruitment Team always has a number of businesses that are available for resale, and once a franchisee decides to sell up everything possible is done to support them in their decision. This includes helping with the valuation of the business, due diligence, marketing and legal issues. Interestingly, when compared to a cold start, which Belvoir no longer tends to offer, a franchise resale is considered to be a safe and secure way to enter the franchise market and is viewed very favourably by finance companies. Nevertheless, at Belvoir we always take time to ensure that we find the right person, and to match them to the right business. We want potential franchisees who are ambitious, determined and fully committed to building on the success of the business they are buying. Anyone looking to take on a franchise resale should not only be keen to grow the business organically, but also willing to engage with the franchise support team, carefully considering and taking advantage of everything that the Belvoir Group offers in terms of exciting new income streams. This includes the possibility of expanding their original territory through acquisition at some point in the future. This undoubtedly has the biggest potential to add to the capital value of the franchise they are buying.
If you are considering the purchase of a resale, check the website of the franchisor you are interested in to see if there is a resale section. Get in touch with the franchisor to have a chat about what is available, and look at any territories you may be interested in. Ask the franchisor what the average time is that business owners tend to stay before looking to sell, and what support is offered throughout the sales process. Having a good exit strategy is just as much a part of the franchise journey as buying a business in the first place. I wish you every success in your quest to find the perfect business opportunity.
