Franchise Q&A
Mark Stenning
Business development manager at Mac Tools
Q: Do I need previous experience in the industry or sector of the franchise I choose?
A: Unless the franchise you are buying into is highly technical or part of a niche sector, you do not have to have previous experience in the sector or industry in which you are looking to invest. Most franchisors will give you the required support and training you need to open and run a successful business. However, you must also think about whether the franchise suits your skillset and aspirations. If you have no experience in customer service or do not enjoy this aspect of running a business, then a franchise based purely around customer service may not be for you! Although the franchisor will train you fully to run their business, if you do not enjoy it, you are less likely to be successful. At Mac Tools, we ask that you have the drive and determination to succeed and uphold our brand values and ethos. We can off er extensive training in all aspects of the business so that you’re ready to hit the road and start building a strong customer base.
Russell Ford Director at Owen White Solicitors
A: All franchise agreements that are compliant with the British Franchise Association’s guide to the Code of Ethics entitle a franchisee to sell their business in order to realise their investment subject to certain conditions. In most agreements the conditions are similar; for example, the business can only be sold to a person who will become a franchisee. Furthermore, the prospective franchisee buyer must meet the franchisor’s reasonable requirements, such as being solvent and having no criminal record. It is not, however, the job of your
franchisor to choose the buyer of your business. You may be marketing a business for sale and you want to get the best possible price for your business. You may have two or more potential buyers and that may result in a bidding war. The franchisor has the right to approve your buyer but they are not entitled to select their preferred candidate and then refuse to allow you to negotiate a price with any other candidate. They might recruit franchisees for virgin territories on that basis, but that would be an unreasonable imposition in a resale scenario.
Q: I want to sell my franchise business but my franchisor tells me they have the right to select which franchisee I can sell to. I am concerned it may not maximise the price I get for my business. Is this right?
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BusinessFranchise.com | December/January 2017
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