What to Look for in the Franchisee’s Business

When you start your resale franchise business search, you need to establish a certain set of criteria in what you’re looking for. It’s easy enough to decide what industry and geographic region you want to work in, but there a few things to look out for to make sure the resale franchise you buy isn’t a lemon. Here are the most important things you want to look for when buying a franchise resale.

Something You Believe In

Above all else, you need to invest your time and money in a company with a product or service that you can get behind. Imagine yourself working at that company and determine if it’s a place where you see yourself thriving for years to come. Franchising should be a long term commitment, not a get rich quick scheme, so real passion for the business will go a long way in ensuring success.

Positive Net Income

Take a look at the resale franchise’s financial records and see how it has been performing over recent years. Try to notice any trends in the business and where it might be headed. Are revenues increasing year to year, or are things mostly static? Ask an accountant to help you out with this as there will be quite a lot of data to go through. Look at cash flow trends as well, and try to make a projection into the future and determine whether or not the business will be a money maker.

Strong Brand Prescience

The company that you invest in should be well loved and recognized in the community. Brand loyalty and identity can take years to develop, and successful companies all have a strong prescience. Customers are extremely loyal to the brands they know and trust. A company that already has a strong foothold in the marketplace can be a very attractive choice for buying a resale franchise.

Low Staff Turnover

It can be said that a company is only as good as the staff that work there. Take a look into how long employees stay with the company, and how satisfied they are with their jobs. Low turnover can indicate the company treats its employees well, and it might then be inferred that they do their jobs well. Low turnover indicates happy employees, and a happy worker is a productive one. It will also mean that you won’t have to worry about training new people very often, and that takes time and money.

Reasonable Asking Price

The franchisee should have a business valuation done by a professional accountant. Whatever the asking price is, it should be reasonable. To determine if it is or not, you have to consider many things from their cash flow to current economic conditions, so you might want to look to your accountant for this one. Don’t forget, you can also negotiate the price. That is one of the advantages of buying franchise resales.