Owning a franchise is a big leap, but it doesn’t have to start and end with just the one business.
When I was young, my family had a small rental portfolio that they would self-manage, and I would tag along with my Dad to meet new prospective tenants or hold his tools when he went to do the odd job that was reported.
As time went on and I grew up, I gradually took on more and more responsibility, from showing potential tenants around the properties to arranging repairs and ordering materials. In the year 2000, I took on the whole portfolio.
Fast forward to 2012 and I came across a Belvoir branch in Kettering, Northamptonshire where I lived. As a landlord with a property portfolio, I made an inquiry about its ‘Find A Tenant’ service. I soon built up a good relationship with the owner and jokingly said that if he was ever looking to sell the business, I would be interested in purchasing it. Six months later, he contacted me to ask if I was still interested in buying his business. The ownership was transferred over to me mid-2014.
Like any business, to make a franchise a success inevitably comes with some sleepless nights, uncapped working hours, and you need the drive and passion for success. But, being part of a franchise also gives a sense of security and you know that your legal compliance is all in order so you can focus on growing the business right away.
Finding the right acquisition
In 2017 I wanted to expand the business further, so set about looking for other associated businesses to take on or independent estate agents I could take over via mergers and/or acquisitions.
As part of my search, I asked Belvoir’s acquisitions team to assist, and between us, we came across an independent not far from me that was thinking of selling. This independent was held in high regard by the local community and had built up a good reputation over a number of decades working in the town.
Due diligence
As with any business deal or partnership, it is incredibly important to do your due diligence before committing to any investment or contractual agreement. Also, ensure you have your own accountant and solicitor to look over any paperwork or accounts for a second and third opinion. If you are expanding into international markets, look into the tax laws in that country before you finalize a deal. For example, if the seller owes any payroll or other business taxes, the purchaser can be chased for these.
As well as the legalities and finances, look into the reputation of the business you are merging with or acquiring. If you can, speak to previous customers or suppliers. If your company has a bad reputation, this could be a mammoth task to win trust and turn things around after you have taken over.
Look into free media monitoring tools like Google Alerts or TalkWalker, whereby you can receive an email alert whenever they have been mentioned on social media or in the press.
What do you want to keep?
After I had done the due diligence with the estate agency I wanted to acquire, we got down to the numbers and agreed on a sale. Thankfully, there was one other important aspect we were in total agreement on – the staff.
I knew I needed a team with experience in property and who knew the local market and geography of the town and surrounding areas inside out. Equally, the outgoing owner wanted to make sure that their team was in safe hands and their jobs protected. In essence, everything remained the same except for the company name in my case and this worked out well.
Now I have four offices: Corby, Kettering, Desborough, and Coventry. Thankfully, all offices continue to go from strength to strength and are all profitable businesses in their own right.
Consider what you want to keep and what you want to change very carefully. Whilst you might be tempted to come in with a ‘new broom’ and put your stamp on the business, remember what attracted you to this company in the first place and develop on it.
5 THINGS TO CONSIDER WHEN ACQUIRING OR MERGING A BUSINESS
1. THE PEOPLE
From staff to suppliers and customers, think about who you will need to keep the business running seamlessly. Ask to see the contracts they have in place with these people if possible. You will have to honor these or renegotiate them when you take over
2. YOUR SUPPORT NETWORK
Pull together a group of people you trust to look after your best interests, such as solicitors, accountants, business coaches, or mentors. You can ask these people for professional help or emotional support or advice
3. VALUE
The business you are acquiring/merging with may have already been valued, but this doesn’t mean you can’t also have it valued independently
4. DUE DILIGENCE
Go through the company with a fine-toothed comb and look for anything at all that could put your or your business at risk
5. ASSETS
Clarify if any assets are included in the acquisition/merger such as capital equipment, buildings, and computers. If you don’t drill down on the specific items, you might find you take over a lot less than you originally thought
THE AUTHOR
Bobby Singh Braich has been working in property for 21 years. He now runs a chain of Belvoir! estate agent franchises in the East and West Midlands.
