Hit the ground running (Daily mail franchise story)

Why not hit the ground running

By: Linda Whitney

YOU don't have to get into business with a start-up. Buying an existing franchise - known as a resale - might be a better option. Derrick Simpson of Franchise Resales says: 'With a resale you get cashflow from day one, stock, readytrained staff, and an existing presence in the marketplace.' Resales become available for lots of reasons and prices vary according to individual franchise area. A resale, while often more expensive than start-up franchises, can be a bargain if a quick sale is required. Banks might be more willing to lend for resales than start-ups, especially where there's strong trading history.

Cathryn Hayes, national franchise manager at HSBC, says: 'Find out the reasons for the sale, as well as researching the franchise. Get advice from your accountant. Check how the business has performed and if it is profitable.' Can you see ways to make the business more profitable? 'Ask the franchisor what you could change to increase growth,' advises Dennis Chirgwin from animal services franchise Animals At Home.

With 50 franchisees, a few Animals At Home territories are usually available for resale.

Compare the asking price with other businesses in the area. Prices for resales are often negotiable.

'With a resale that employs people, staff management skills are vital,' says Dorian Gonslaves from Belvoir!, the lettings franchise.

Animals at Home 08701 126 613,

Belvoir! 01476 570 000,

HSBC www.hsbc.co.uk/franchise

Banks are still willing to lend

DON'T let the prospect of raising money put you off a franchise. Banks are still lending. The franchise arms of the High Street banks will typically lend 50 to 70 per cent of the cost of getting started, and homes are still being accepted as security.

'Banks are more careful now, but they are still lending,' says Chris Allison of business management franchise Auditel, which requires an initial £32,900 investment.

Carl Windsor, who took a bank loan with wife Bev to start an Auditel franchise in Brigg, Lincolnshire, says: 'Many banks refused to lend initially, but eventually they did.'

If you do not want to borrow, there are other affordable franchises available. 'We pitch our £3,990 investment low so it's affordable,' says Chris Hardwick from Carlton Premier Cars.

Auditel 0800 583 3355,

Carlton Premier Cars 0800 622 6905

Buying a franchise made sense

BUYING a resale franchise made sense for us because with three children, we needed an income from day one,' says Pamela Schure. Pamela, 47, and husband Colin, 49, bought the six-year-old Belvoir! lettings franchise in Cockermouth, Cumbria, three years ago.

'As soon as I walked into the office, I could see we could increase business,' says Pamela. The couple moved the office from the first floor to street level and changed the furniture and layout to make it more welcoming.

They were flexible about working after office hours.

'Turnover grew by 9 per cent in year one, 21 per cent in year two, and this year we have taken over one of our competitors in Whitehaven so we should increase turnover by 60 per cent,' says Pamela (pictured with Colin).

'But taking a resale franchise requires a lot of energy, because you have to meet the expectations of existing customers straight away.

'There is always some problem you did not find out about before you bought, but you have to work with what you have got, and you do get the benefit of income from day one.'