Does anyone have experience buying a franchisor?

August 20, 2021

by a searcher from The University of Chicago - Booth School of Business in Chicago, IL, USA

I'm speaking to a franchisor and curious about any red flags I should keep in mind when evaluating them? My biggest concern about this is how to motivate franchisees/putting the fate of our company in the hands of a dispersed workforce.

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Reply by a searcher
in Barrington, IL 60010, USA

We have been in business for over 26 years and are now an emerging franchise. Regarding your concern about motivation, this is one of the main reasons we decided to franchise. There was an informal study around 2006 of an East coast company, Sterling Optical, they had over 100 locations and sold the business to a conglomerate; to recoupe some of their investment the conglomerate offered franchises to the store managers, about half of the managers took them up on it and of those that became franchisees, their sales went up by 32%; same products, same location, the same staff the difference being that they were now owners instead of just working for a paycheck. As far as the dispersed work force goes, you should have systems in place to oversee and manage your franchise locations, just like an athlete has a coach to help him refine his skills and talent, your franchisees should welcome and appreciate your oversight to facilitate their peak performance. SYSTEM is an acronym standing for, Save Yourself Substantial, Time Energy and Money.

Reply by an intermediary
from University of Houston in Houston, TX, USA

Would anyone have any interest in a Houston-area 30yr old bakery/brunch franchisor with three franchisees? The owners (husband/wife) want to slow down and don't have capital or people for expansion. Financials will not qualify for sba, but owners are open to seller-financing up to 80% of purchase price.

Asking $975,000
Revenue $1.5m
SDE $300,000

Send DM for NDA. Thanks

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