For all you Investors looking to buy a business!
Franchise resale prices are higher than those of non-franchise resales!
Lets face it, individuals looking to start/buy a business are investors. Whether you are an owner/operator, semi-passive or passive, you are investing money for future return.
What most investors don’t consider when investing in a business model (but should) is the “Resale” value if they decide to sell. Here is some food for thought, “Franchise Resales” are proving to be more lucrative than non Franchise businesses that are on the market.
A study conducted at Palm Beach Atlantic University’s Rinker School of Business has documented that franchise businesses fetch more at resale than non-franchise businesses. Three PBA Rinker School faculty researchers examined 2,159 business resales that occurred over a decade. From the data, they determined that franchise resale prices were 1.5 times as much as those of non-franchise businesses. Small businesses in the franchise industry’s food/restaurant (non-grocery) category sold at .5 times higher price than other personal and professional small business categories
Franchise resales are big business in the 21st Century, and investing in such an opportunity presents certain advantages over independent business.
- You’re investing in a brand and system that has a track record
- Success in a product or brand that has been well received by the marketplace
- Brand recognition
- Instant cash flow
- Fully trained staff (if applicable), Franchise systems have detailed training for employees of the system
- Marketing support
- Bank support, most banks look favorably towards lending to Franchisees of established Franchise systems with track records
Most investors consider the up front investment to return of that investment over time but should also consider the Resale value once the end is in sight.