Calhoun Companies

How to determine if buying a franchise is a good business move. There are several factors in valuing a franchise business for sale. Each of these factors can help you gain the information to make an informed buying decision.

• Typically the longer the franchise agreement the higher the value.
• Some franchisors will offer franchisees the opportunity to expand their franchise for a certain period of time within a given territory. This limited protection can add some additional value.
• Frachise locations where there are less demanding store hours can add value
• Just like any other type of real estate, location can add a higher value to the franchise
• The cash flow is another factor that can positively affect the value of a franchise
• Some franchise agreements require the franchisee to renovate their store on a set timeline. These cost are fall under the franchisee's responsiblities. Depending where the franchise is on this timeline, the value of the franchise can be reduced by a percentage of those renovation costs.