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According to this year's NatWest / British Franchise Association survey the number of franchises resold as going concerns is 35%. This figure is predicted to rise to 40% by next year and some predict that it will outnumber new opportunities within five years. Some entrepreneurs prefer to work in the start up phase of a business and they might take on a virgin franchise, build it up and sell it relatively quickly at a premium. Other entrepreneurs are skilled as business managers and for them a resale may be more tempting; although it will cost more money it will be established and will generate profits immediately. Those looking at the franchise business model should remember that they are creating something of value that can be resold. They should also make sure that their legal adviser ensures that any business they do buy into can be resold.
The Department of Trade and Industry run a Small Firms Loan Guarantee Scheme for businesses fulfilling certain criteria. This service may help with the purchase of an established business or franchise resale. Click here |
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