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Resales Another Opportunity for New Franchise Owners


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At an expo filled with brands looking to expand by signing new franchisees to single, multi-unit or area development agreements, an education session devoted to franchise resales—buying an existing franchise operation—seems counterintuitive, but as Wireless Zone’s Keith Dziki said, “We want all our franchisees to have an exit plan. Every franchisee has a life cycle with the brand—it’s not forever—so resales are another way to bring new owners into the system.”

Speaking at Franchise Expo South in Dallas today, Dziki, director of franchise development for Wireless Zone, said his view is that resales are simply part of franchising and don’t necessarily mean the store for sale is performing poorly. Oftentimes it’s quite the opposite, Dziki continued, and buying an existing location carries with it a host of advantages, including cash flow already being in place.

“These existing franchise locations are making money from day one” in most cases, agreed Rod Lowe, franchise marketing manager for 7-Eleven. “You’re inheriting an established sales record in that market.”

The ability to leverage brand strength, plus physical components such as the building and equipment, are other benefits of resales, but, Lowe noted, these can all be potential disadvantages as well, depending on the condition of the location.

“You’re usually getting everything as is,” said Lowe.

That “as is” condition can sometimes necessitate not just refreshing the look of a store or upgrading equipment—the cost of which usually falls on the buyer—but also addressing the brand’s reputation in any given market.

“Have the brand standards been followed? Do you need to do work to build up the brand name? These are some of the things you have to consider and do you due diligence, the same as if you were looking at a new location,” said Dziki. “Success, ultimately, is up to you, not the location you buy.”

Franchise Expo South continues through Saturday at the Kay Bailey Hutchison Convention Center in Dallas.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is associate editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is editor-in-chief of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is staff writer at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Laura MichaelsLaura Michaels is managing editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
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