We already know the benefits of buying a franchise: Entrepreneurs-turned-franchisees are boosted by business assistance, brand recognition, low failure rates and a built-in customer base. But what about selling a franchise? When it comes time to retire or change lanes, are there any advantages for the resale of a nationally known brand? A recent study says there are many.
Researchers at Palm Beach Atlantic University’s Rinker School of Business took a look at more than 2,000 business resales over the past decade and determined that franchise resale prices were 1.5 times more than those of nonfranchise businesses, with food/restaurant franchises fetching even higher numbers.
Why? According to the study, franchises earn more money at resale because those businesses have a proven track record that helps create
accurate revenue forecasts. It also helps that store premises have already been built out and furnished, and customers, a workforce, and a supplier network are already in place.
And, as franchises age, this is an important topic. Resales seem to be happening more frequently in the industry, the study notes, especially in this post-pandemic climate. But a franchise resale doesn’t necessarily signal a failing market. Retirement and lack of interest in inherited takeovers seem to be the driving forces as of late, researchers say. All of these factors create a valuable opportunity for those willing to invest and take over.
These new findings offer plenty for future small-business owners to consider, and the purchase of a franchise resale is something in which FranServe franchise consultants specialize. You just have to ask yourself a few questions first.
Want to avoid the stress of the startup period? Consider a franchise resale. Want marketing and customer-service advice plus a tried-and-true business concept? Consider a franchise resale.
Before committing to any new business venture, FranServe consultants will help you do your homework. They’ll learn why the franchisee is selling, look over numbers, and review the territory’s stats. Is there competition nearby? Do local customers still need this franchise’s services? If the numbers add up, it might equal a great investment!
~ Jessica Petrucelli
Contact: franserve.com