Franchise New Zealand - Year 31 Issue 02 – Winter 2022

Page 22

Buying a Franchise: Financial Matters

HOW TO FIND A GOOD OPPORTUNITY Daniel Cloete from Westpac offers some important questions for business buyers


espite headwinds like inflation, interest rate rises, supply problems and a general shortage of staff, economists are still seeing strong growth for the New Zealand economy through 2023. Although you can argue that the shortage of staff and some other factors may be linked to the bounce-back effect after lockdowns, the overall picture suggests that there are still good new business opportunities for the wise buyer. In my last article, I looked at the continuing availability of funding, the need to manage working capital, and why buying a franchise can improve the options for business buyers. I also suggested some questions that buyers might like to ask about the industry that they were looking at (read that article at

Daniel Cloete franchise, you can get some real, up-to-date information from several sources. These include: • Speaking directly to the franchisor team – not just the franchise salesperson but, as you get serious, some of the specialists in areas such as marketing and property; • Talking to other franchisees in the group; • Talking to other franchises in the same industry; • Consulting specialist accountants, lawyers and bankers who know the franchise and its competitors in the industry, and who can help you through the due diligence process.

So what do you do next? After exploring different industries and trends, and considering the franchise opportunities within your preferred sector, you need to get into the details.

Don’t be hesitant – asking the hard questions when looking at a franchise dramatically increases your chances of buying a profitable business that is also right for you.

This is an area where franchising is a great model for someone wanting to get into a business for themselves. If you are starting your own independent business, all you have to go on is your own research and your feel for the market; if you are buying an existing business, you are dependent on figures supplied by the vendor and your belief that you can do at least as well as the previous owner. But when you buy a

So what should you ask franchisees? Franchisees normally love to talk about their businesses, and you can learn a great deal from them about what it’s actually like running the business, typical cost structures and the support provided. They may also be prepared to talk about profitability, margins, and other things




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+64 22 1201672 Franchise New Zealand

Winter 2022

Year 31 Issue 02

Articles inside

Once In A Lifetime article cover image

Once In A Lifetime

pages 26-27
Built Around You article cover image

Built Around You

page 51
The Franchise Bible article cover image

The Franchise Bible

page 47
Going Up? article cover image

Going Up?

page 43
Lessons Of A Lifetime article cover image

Lessons Of A Lifetime

pages 28-30
Wise Head - Young Shoulders article cover image

Wise Head - Young Shoulders

page 15
Side By Side article cover image

Side By Side

page 11
Foot To The Floor article cover image

Foot To The Floor

page 65
Always In Demand article cover image

Always In Demand

page 61
Café Franchise Adds Up article cover image

Café Franchise Adds Up

pages 59-60
20 Years At The Top article cover image

20 Years At The Top

page 55
Giant Steps article cover image

Giant Steps

page 53
Healthy Returns article cover image

Healthy Returns

pages 37-38
Family Business article cover image

Family Business

page 39
Living The Good Life article cover image

Living The Good Life

pages 44-46
Fresh Approach article cover image

Fresh Approach

page 33
Building Confidence In Kids article cover image

Building Confidence In Kids

pages 13-14
Sandwich Course article cover image

Sandwich Course

pages 19-20
All About People article cover image

All About People

pages 31-32
Fast & Fresh article cover image

Fast & Fresh

pages 25-26
Bounce Back article cover image

Bounce Back

pages 6-10
How To Find A Good Opportunity article cover image

How To Find A Good Opportunity

pages 22-24
Money-Making Machine article cover image

Money-Making Machine

page 21
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