Would you like to own a local franchise? We can help you find the right fit for your interests, experiences, and finances. If you buy a franchise that is already operating, you can bypass the challenges of start-up and start receiving cash flow right away. There are many other reasons to buy an existing business.
Your resources are already in place. Although you are usually free to make changes, an existing business often has relationships and accounts with reliable suppliers. You can skip the trial and error and use the services that were already working well for the previous owner. You won’t have to establish credit from scratch, as your suppliers are already familiar with how well the business is producing
Your employees and customers already have relationships. If you buy a franchise, you will probably have employees who know the business and its customers well. A solid customer base and a staff that knows and anticipates their needs is a perfect environment for a new business owner. If everyone loves Sarah and she continues to answer the phone or work the cash register, this can be a tremendous asset during the transition of ownership.
Permits and licenses are already established. When you buy a business that is already operating, you don’t have to worry about finding and getting approval on necessary permits and licenses for your industry. Many licenses can simply be transferred, and you can feel confident that most re-applications will be granted based on prior approval.
How To Choose The Right Franchise
If you want to enjoy the benefits listed above, you will have to be careful to choose the right franchise. This includes research to ensure that it is a well-run, profitable operation. However, there is more to finding the right business than operational efficiency and cash flow. If the business is not well-suited to your needs, a smooth-running system can quickly fall apart.
Your search should begin by asking questions to identify what types of businesses you would enjoy operating.
In what environment do you thrive? Do you prefer to work outdoors, perform calculations in an office, or whip up creative dishes in a kitchen? Most small businesses require long hours, so make sure you will be in an environment that is most natural for you.
How much contact with the public do you desire? All businesses require contact with customers, but some require a higher degree than others. If you prefer to work quietly and minimize interaction with people, a coffee shop or retail store should be crossed off of your list.
What skills and experience do you already possess? If you can find a business that is in a niche you are already familiar with, you will have the best chance of success. You don’t have to choose something that lines up with your current profession, but it should at least be an industry in which you are familiar with the terms and trends.
How to Evaluate the Feasibility of a Franchise
Once you have narrowed the choices to franchises that are suitable for your interests and experience, it is time to evaluate the business itself. There are some specific aspects you should consider.
Why is the Buyer Selling? The first thing you should find out is why the current owner wants to give up the business. It could be for retirement, relocation, or to pursue other interests. However, it could also be a decline in demand, an increase in competition, or the fact that most of the business’ equipment will need replaced in the next year. Make sure you know the full details before move forward.
How much working capital will you need? Some industries will require much more than the purchase price to get started. Ask how much capital is necessary for inventory, overhead, and insuring accounts receivable. Find out how long it takes customers to pay invoices and what payment terms their suppliers offer. These questions can offer insight into cash flow that you might not see by looking at a balance sheet.
Are there off-season times you will need to consider? Make sure that you know more than just total profit. Ask about seasonal cycles during the year and how much income you need to set aside in the most profitable months. Find out if there are times when you need to hire more help or lay off employees to meet payroll.
The many facets of evaluating a business for purchase can seem overwhelming, but they are not impossible. Franchise Brokerage Services can offer the experience and support that you need for a successful purchase.
Contact Us to discuss your franchise interests.
Buying a business is rewarding, but it certainly isn’t easy. We often talk to people who have given up on a business purchase because it was too complicated and time-consuming. Our targeted franchise search services in Chattanooga can help you get to closing with ease. A seasoned acquisition search expert will be there to support you every step of the way.
– Save time by narrowing your search quickly
– Save money by avoiding costly mistakes
– Buy with confidence while utilizing professional guidance
How To Find A Franchise That Is Right For You
The steps to conducting a target franchise search are simple, and each one involves help from an experienced broker.
Schedule a free consultation.
During your consultation, one of our brokers will discuss what type of business you are looking for in your local market, what your finances will allow, and how a business would fit into your lifestyle.
Retain a broker.
When you are ready to begin your search, you will retain a broker to be your primary point of contact through the entire process. Your broker will walk with you from the initial search to closing.
Your FBS broker will search for franchises in your area based on the criteria that you discussed in your consultation. Once the list is narrowed, you will begin to evaluate each opportunity.
If the business is a good fit and a sound opportunity, your broker will make an offer and negotiate terms and conditions of the sale on your behalf. We have even made offers that were accepted by owner who weren’t planning to sell.
Close the deal!
If an equitable deal is reached, you can schedule your closing and buy your new business. Franchise Brokerage Services can even help you get financing for the purchase.
If you are interested in buying a local franchise, Franchise Brokerage Services can lead you through a successful transaction. Contact us today to discuss your business interests.
The following is a step-by-step summary of the typical business sales process:
- Initial seller meetings are conducted by the seller’s broker (a professionally trained business broker, holding a real estate license when required) and the seller is educated on the process of selling a business.
- Market analysis, appraisal, price positioning.
- An Engagement Agreement is filled out by the seller’s broker & signed by the seller. Immediately after signing the Representation Agreement, the Seller provides the Broker the following:
- A list of equipment and other assets to be included in the sale.
- Profit and loss statements, balance sheets, and tax returns of the business covering the last three years.
- The most recent financial data.
- Real and personal property leases.
- Marketing information that is used in the Company’s business.
- Seller’s broker prepares all of the marketing information and it is approved by the seller. The Engagement Agreement is entered into the Sunbelt proprietary database, and a Business Profile is created. Seller’s broker introduces the Business and fields initial questions to all of our other brokers during weekly office meetings.
- All other brokers match the Seller’s Business Data (SBD) against buyers in their respective queues (Buyers who have previously been interviewed, signed a Confidentiality Agreement and filled out a detailed Buyer’s Profile). Seller’s broker plans an advertising strategy and the SBD is added to web sites in such a manner so the general public cannot identify the business.
- Buyers in queue and buyers who have responded from the advertisements will have their backgrounds and finances evaluated to determine if they are qualified buyers. If qualified buyers are interested in the business for sale, they will be shown a Business Profile. If further interest is shown, the seller’s broker will arrange a meeting with the seller.
- If a buyer wants to make an offer, the buyer’s broker will write the offer and secure a deposit.
- Seller and seller’s broker will review each offer and decide whether to accept it or counter the offer.
- Once an offer is accepted, the seller’s broker will arrange a seller/buyer meeting where the seller and buyer can begin addressing contingencies within the offer.
- Contingencies are address and removed.
- The broker will facilitate the legal documention and revisions.
- The actual sale takes place.
When considering your financing options to buy a business, it is important to consider both your short and long-term needs. Failing to consider long-term financing needs may impact the viability of future business plans.
Franchise Brokerage Services can help you identify possible financing sources and provide options that are suitable for the long-term success of your business. Then, to ensure the issues and requirements of the financing request processes are addressed appropriately, your Franchise Brokerage Services franchise broker will provide assistance with the financing process and negotiations. Throughout the process, your FBS franchise broker will work to make sure all parties are working towards the same timelines and goals.
Franchise Brokerage Services has developed strong relationships with banks, private equity firms, venture capital firms and other specialized lenders. Our network has 30 years of experience in helping to arrange financing for small to medium-sized businesses.
Our office can help introduce you to financing sources. We are dedicated to helping buyers throughout the loan process, assisting with documentation and due diligence to help you secure an acceptable loan commitment.