This is a great time to buy a resale franchise. Because? for many reasons. First of all, over the past 20 years many franchises have been successfully built and run by their dedicated owners and now that the baby boomers are retiring, their children don’t want to continue the family franchise business.

Let’s face it, some kids grew up with and in those businesses, whether it was KFC, Subway, or Jack-in-the Box and the like. They just don’t live up to the expectations of the new generation.

Second, having watched their parents and family members work in the various franchise systems, the children “heard” the other side of franchise ownership when their parents returned after a hard day’s work and complained and they grumbled about how hard it was getting and how tired he was. They were; They don’t want to be in those same shoes.

Yet precisely because these owners have built good businesses, it makes franchising more attractive to new entrants into the proven system as new opportunities fade and territories develop; brand maturity level and location can make for a great investment in a going concern from the point of view of someone leaving the corporate world to be their own boss, or one simply considering a safe business investment for the first time. Others have accumulated enough funds for retirement and built substantial equity in their homes, providing a good source of funds for a healthy down payment and a low debt repayment schedule, leaving an adequate supply of business cash flow to enjoy. .

So I say buy right, from a tried and trusted brand and follow these tips:

1. Don’t overpay for the business and stick to the real numbers. Get a franchise valuation if you’re not sure what the fair price is

2. Do not pay for projected future profit increases or unreported cash sales; stick to past performance and whatever you earn extra through your hard work is a return for that work and for which you should be compensated when you sell

3. Ask for seller financing for around 50% of the price you agree on; If he believes in your business location and franchise system, you should back it up, as long as you follow that proven system. You may need to provide another guarantee.

4. Do your due diligence and talk to other franchise owners in that franchise to test your own experiences; you will be surprised how forthcoming they are with details

5. Calculate your Return on Investment in the franchise vs. other safe investments; remember to add principal accumulation as you pay down the note as part of your analysis

6. Analyze all encroachment and due diligence issues; request a seller disclosure statement for added protection

7. Check the franchisee’s turnover for that location and customer reactions at the location to see where you can improve; After a while, some franchisees put their stores on “cruise control,” which is another indication that operating standards and customer service levels may have begun to slip. These are great opportunities

8. Decide on a time limit that you will dedicate to that franchise system, before the burnout syndrome infects your own behavior and efforts; then it will be time to draw fresh blood and sell it, and so the cycle continues.

9. Recent adverse publicity and litigation may indicate a good buying opportunity. Investigate.

10. Only buy a business that has good books and records and is presentable

Simply put, the biggest problem when buying an existing franchise is not doing your homework in the following areas:

Inaccurate cash flow analysis (owner’s compensation, debt service)

Paying too much above market price (a franchise valuation can be a good guide)

Brief due diligence investigation on the franchisor (Subway, Quizno’s, Schlotsky’s)

Inadequate comparisons of industry competitors and newcomers (Extreme Pita, a case in point)

Relying completely on what your uncle says instead of getting an independent second opinion

Adhering to an already expired and saturated franchise, without territorial protection

Not interviewing a cross section of franchise owners and experts and keeping an open mind

Improperly structuring the deal as a cash event, without any seller financing

There are plenty of good franchises available for resale, go for it!