WHEN I’M SIXTY FIVE !

Taking on a successful franchise is one of the best things you can do to secure a comfortable retirement and do all the things you ever wanted to in life. More people than ever before are changing careers and reaping the rewards of running your own franchise.

Putting your energies into a good franchise can result in a comfortable retirement. Old franchisees never die, they just… buy a Spanish villa, take up golf, continue building profitable businesses, travel, take up SKI-ing (spending kids’ inheritance) and more. The world is your oyster.

There are many options for franchisees retiring from their business,  including moving to the sun, appointing a manager to run the business for them or selling their business on to a new franchisee and releasing a good profit for the hard work and goodwill they have built up in their business.
 
Options to renew the franchise agreement mean the franchisee can run his or her business for a number of years before thinking about what they will do next, However, many Franchisors are now addressing exit routes with their new franchisees, so all parties know what they want to achieve and by when.

The outlook for franchisees is bright, as confidence and profitability grow. Those involved in franchising are generally optimistic about the future, and 92 per cent of franchisors (60 per cent of franchisees) forecast an improvement in their business over the next year. So for many, working hard to build a successful franchise is the way to a bright future. But what do successful franchisees do with the fruits of their hard work?
  
Compared with working for someone else, successful franchisees can look forward to a great future. If you work hard as an employee for 50 years, and you will end up with a pension and maybe a watch. If you work hard as a franchisee you can build up a big asset which you can sell and put towards your retirement.
 
Planning an exit strategy is key. Look at how easy it is to sell, what the value is likely to be, how “goodwill” is valued (if at all) and how the business can run without the franchisee. Look for capital growth as well as income. It takes a working lifetime to build a respectable retirement fund as an employee but with a franchise, you can grow a very significant saleable asset over the course of five years as well as drawing an income. Planning an exit strategy is crucial as potential purchasers will want to carry out due diligence checks and it is also important to make sure that your business is sold in the most tax efficient way. Take advice BEFORE signing as it is not possible to change terms after the event and you may pay Capital Gains tax twice on the same transaction!!

If you need further advice regarding the sale of your business contact Phil Harrison on phil@franchise-uk.co.uk

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