BUYING A FRANCHISE RE-SALE 

Greyson Legal are expert franchise lawyers with offices in Brisbane and the Sunshine Coast, Queensland. We have acted for numerous clients looking to enter into the franchising industry through purchasing a franchise business. If you need assistance with buying a franchise, whether a re-sale or greenfield site, contact us for a no obligation discussion. 

for sale, sale, franchise for sale

A franchise re-sale involves the purchase of an already operating franchise business as a going concern from an existing franchisee.

This can be contrasted with buying a "greenfield" site, which involves buying a new franchise territory direct from the Franchisor.

When you buy an existing franchise business from a franchisee by way of re-sale, you will be dealing with at least two parties - the outgoing franchisee (Seller) and the Franchisor. If the Franchise Business operates from a leased premises, there will also be a third party, the landlord, who will need to give their consent as far as the outgoing tenant and incoming tenant are concerned.

As such, there will often be:

  • a Contract of Business Sale as between you (as Buyer) and the outgoing franchisee (as Seller); plus

  • the Franchise Agreement as between you (as incoming franchisee) and the Franchisor; plus

  • the Disclosure Document (required under the Franchising Code of Conduct); plus

  • possibly a Lease, as between the Landlord and Tenant; plus

  • an array of other documents depending on the exact nature of the transaction, such as: deeds and licenses, etc.

If the premises from which the Franchise Business trades is also retail in nature, there may also be separate conditions to be satisfied under the Retail Shop Leases Act 1994 (Qld). 

Make an Enquiry

Buying a franchise business by way of re-sale can present an exciting opportunity to purchase an existing business already set up and operating under a known brand. But there are always risks involved and there can be a number of complexities which require expert legal advice.

Conducting thorough due diligence and obtaining advice from franchise lawyers, such as, Greyson Legal - is important to help you make an informed decision before committing to the purchase.

If you have any questions about buying a franchise business, whether a franchise re-sale of greenfield franchise - get in touch with Greyson Legal | Franchise Lawyers.

Advantages of buying a Franchise Re-Sale

Buying an existing franchise business by way of re-sale has the advantage that:

  • the initial set-up has already been done;

  • there is a trading history;

  • there is an existing customer base and goodwill;

  • staff familiar with the business may already be in place;

  • the supply chain is already in place;

  • you can see what is already there and assess what needs updating;

  • access to finance may be easier as financiers can base their decision not only on the Franchise system and your suitability, but also on past business trading history.

Disadvantages of buying a Franchise Re-Sale

There are also disadvantages to consider, such as:

  • the purchase price for a franchise business re-sale maybe higher (than a new greenfield franchise) as you will also be paying for goodwill;

  • there could be underlying problems with the existing franchise business;

  • being an existing business, the plant & equipment maybe outdated or in need of repair and require modernisation or replacement;

  • past customers may have had a bad experience with the seller, thereby impacting negatively on the goodwill.  

HERE ARE SOME CLIENTS WE HAVE ASSISTED TO PURCHASE A FRANCHISE RE-SALE

Stepz Fitness,
Benowa
Platinum Electricians,
North Lakes
Subway,
North Lakes
Matt Fiddes Martial Arts, Cooroy

Considering buying a Franchise Business ?

Contact Greyson Legal for further information on how we can assist you with the purchase.