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Starting a business from scratch can be a daunting task. Policies, procedures, infrastructure, staff, suppliers, marketing – it can seem like an endless list of things to do even before you make your first sale!
By comparison, buying an existing business allows you to benefit from the hard work put in by the previous owners and should provide you with immediate customers and ongoing revenue.
However, well-established businesses with a solid track record of delivering yearly profits don’t usually come cheap.
We recommend contacting us prior to making your first initial enquiry on a business you are interested in buying. This way we can help guide you through the process and discuss what your options are. Once you have opened discussions with the sellers, it is crucial to complete a thorough due diligence process and highly advisable to obtain independent financial and legal advice. Once satisfied, it is usually at this point you really begin to negotiate a sale price and final terms.
A franchise business is a business in which the owners of a company, or “franchisors”, sell the rights to their business logo, name, and model to third party retail outlets, owned by independent, third party operators, called “franchisees”. Franchises are an extremely common way of doing business and the chances are you buy a product or service from one almost every day.
There is currently an estimated 1200 different Franchise brand’s in Australia covering pretty much every industry and business type there is.
Been to McDonalds or KFC recently? Filled the car up at 7-Eleven? Bought groceries at IGA? That’s right, all franchises. Some famous non-food or drink related franchise businesses include;
Harvey Norman Mitre 10 Bank of Qld Beaurepaires Century 21
Mister Minit Kwik Kopy Australia Post Cash Converters Specsavers
Optus World Poolwerx Barbeques Galore Anytime Fitness Priceline Pharmacy
There are a number of factors that lead to the cost of purchasing a franchise, not least the size of the brand, expected revenue and location. Upfront costs can range anywhere from a few thousand dollars for a small new franchise business to a few million for a McDonalds restaurant. KFC famously has a minimum personal nett asset worth of $1.5million to even be considered and at the top end of the scale, the Hilton Hotel chain has an estimated initial investment range from $30 million to over $112 million!
So if you are looking to buy an existing business or a franchise business, we can help you to obtain specialised finance to get your foot in the door and just as importantly, to help keep those doors open for many years to come.