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The procedure to buy an existing franchise

The recovery of a point-of-sale existing can not be improvised. Before you get your hands on the rare, several types of evaluations are needed. buying back an

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The procedure to buy an existing franchise

The recovery of a point-of-sale existing can not be improvised. Before you get your hands on the rare, several types of evaluations are needed.

buying back an existing franchise carries less risk than a creation, and offers many benefits. But this approach prepares. You will not only have to find the rare pearl, but also perform a series of diagnostics and audits to verify that the business is healthy and sustainable. A journey long, technical and costly, which could not be done without the intervention of specialists.

improved visibility

The benefits of a recovery are real. Firstly, you do not start from scratch because you buy a business that already works, with clients, a turnover and a local reputation. You start more quickly, avoiding the effect of inertia inherent in all creation. Secondly, through the history of the activity, and in particular to the analysis of balance sheets, you will have the favor of the bankers. They will have better reference points and the instruction in the folder will be facilitated.

Find the good deal

Franchise or not, the good deals are rare on the transfer market. Discretion oblige, the transferors are generally little diserts on their intention to sell. Membership of a trade network organized facilitates however the research. To find units franchised to resume, the best idea is to speak directly to the heads of the network rather than from, by luck, in search of a franchise seller.

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>> Article excerpt from the Guide of the Franchise 2018 The Express available here

franchisors are often notified of a possible sale and therefore, do not hesitate to contact us. "They have their word to say in a sale: they have a right of inspection vis-à-vis the prospective buyers (through the approval clause) and may refuse an application if they feel that the person does not have the right profile," warns Franck Berthouloux, the firm Adventi Franchise.

Faced with the aging of its population of licensees (twenty disposals provided for in the eighteen months to come), the network of kitchen experts Mobalpa and SoCoo'c does not hesitate to take action commando in some regions to attract potential purchasers. "We often play the marieuses, and to connect potential purchasers with franchisees sellers", recognizes the director of development.

The price of the existing: a heavy toll

purchase a point-of-sale existing, however, needs to have a good back because this type of operation is expensive. Between the acquisition of the stock, the customer, have the right to enter, the right to lease... the note can quickly climb. The investment for the recovery of a point-of-sale is higher by at least 30% to that of creation.

It is also necessary to examine its skills of the buyer and take into account the managerial dimension of a recovery. "The franchisee can certainly rely on the employees in place, possibly on a right arm, but it must also be accepted by employees who know sometimes more about the history and operation of the company," continues Franck Berthouloux.

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Finally, before any redemption, it is important to determine which of the employees or former boss franchisee, runs the shop. The recovery of a deductible, rental car states, for instance, rarely a problem because the customers come for the brand. In contrast, in a hair salon, it is common that the customer is attached to the very person of the leader.

Aware of the heavy investments required, some franchisors do not pay entry fee to the acquirer (particularly if it is already integrated in the network) while others are offering financial facilities. This is the case, for example, at Mobalpa. "We give franchisees a credit in the ratio of one to one. If the contribution of the candidate is of 80000€, we work in co-funding to the tune of 80,000 euros", explains the director of development.

An approach to prepare carefully

The recovery is also a long process that requires several months of preparation and audits. A number of elements financial, legal and business must be discussed to ensure that the company is healthy and sustainable. Audits should be performed on all the key posts in the company (labour contracts, accounting, composition of stocks, audit of various commercial contracts, bank loans...) and entrusted to an accountant and a lawyer.

These specialists will not only browse the last two balance sheets and profit and loss account: they are there to guide the buyer and inform them of development opportunities. They will also help to understand the turnover and to analyze its origin: what are the products to be sold, at what period, at what time of the day, by who...?

He should not hesitate to ask to the franchisee, transferor daily records of sale or reports monthly. If he is reluctant to disclose this information, offer to consult, subject to a confidentiality agreement.

Thatit form of redemption?

Attention also to the form of redemption planned: according as we take the business or the company shares, the situation is different. "In the majority of cases, purchasers are buying the business. They do not include the assets tangible, intangible and in stock. When they redeem the units (or shares) of the company, if more rare, they acquire all of the assets but also the liabilities (debts to suppliers, loans, leases...).

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This means that they are liable to pay the debt but also of disputes which might occur after the transfer. It is then convenient to integrate with the protocol of sale a warranty of assets and liabilities; it is the buyer protected from future income tax adjustments, or litigation with the prud'hommes," says Olivier Deschamps, lawyer partner of the law firm of Link&A.

Finally, the word order of a recovery remains the discretion. "For employees, there is nothing worse than the rumor of a buyout. They panic and demotivate. A form of sinistrose can be installed and jeopardize the activity. The best is to meet with the franchisee vendor outside the place of sale or closing hours," advises Franck Berthouloux.

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The Express

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