23 Jul Franchise Resales (Part 1 of 2)
Surveys reveal that less than seven percent of business broker’s sales consist of the resale of existing franchises. I have often mentioned that the third sale of my career was the resale of an existing Orange Julius. As a result, I subsequently made either a listing or selling commission (sometimes both) as a result of this sale. The original seller also owned quite a few other Orange Julius units. When I was involved with United Business Investments, our offices did quite well selling not only resales of existing franchises, but also new units.
A recent article in the most recent Franchise Opportunities Guide published by the International Franchise Association (IFA) stated that there are about 757,000 franchised businesses in the US. They are broken down by category, number of units and percentage of the total number of franchises as follows:
Automotive……………………………………. 30,526………… 04%
Business Services………………………………. 93,581……… 12.4%
Commercial/Residential Services ………….61,926 ……..08.2%
Lodging…………………………………………… 25,911 ……..03.4%
Personal Services……………………………. 109,079 …….. 14.4%
Quick Serve Restaurants…………………… 153,425 …….. 20.3%
Real Estate……………………………………….. 87,601 …….. 11.6%
Retail Food……………………………………….. 61,262 ……..08.1%
Retail Products & Services …………………… 97,308 …….. 12.9%
Table/Full Serve Restaurants……………….. 36,436 …….. 04.8%
SOURCE: IHS Global Insights as shown in the IFA Franchise Opportunities Guide (percentages are ours)
Also, keep in mind that new franchises are opening every day. In fact the real growth in small business is from franchising. If you’re not going after franchise resales (which lead to the sale of new one ones) you are missing out on a lot of business.
Thursday’s post continues this article with some suggestions about how to get involved with franchise resales.
Note to Readers: If you have made any sale of franchises in the past 12 months and have not completed our very brief sale form, please do so now. Just send the below information (will take only a minute or two) to tom@bbpinc.com. We are trying to establish a list of rules of thumb for as many franchises as possible. If you want to see a list of what we have currently available, please also email me at tom@bbpinc.com.
Information Requested for Each Franchise Resale:
- Name of Franchise:
- Type of Business:
- Location (City & State):
- Gross Annual Sales: $
- Selling Price (Exclusive of Real Estate): $
- Down Payment: $
- Is Inventory Included?
- Submitted by:
- Name of Firm:
- Phone Number:
- Comments or Additional Information:
