Buying a company that is the franchisor of a franchise network raises particular questions that must be considered during due diligence. These questions are unique to buying a franchisor rather than any other company.
Key areas |
Questions to consider |
IP rights |
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Franchise agreements |
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Franchise system |
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Legal disputes |
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Franchisees' financial results |
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Franchisor/franchisee relationship |
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Franchisor units |
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Growth potential |
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Franchisor's financial results |
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Franchisor management |
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All of the above questions and their varying answers will have a significant impact on the final purchase price of a franchise network. Then, there are also the other issues to consider when planning a purchase of a company. The above checklist is not complete and additional factors must be considered in each case. However, the key factor in the purchase of any franchisor is having lawyers and consultants who know how franchise networks work as members of the due diligence team, as they will ensure that the right questions are asked and that the replies will be accurately understood.
For further information please contact Dan-Michael Sagell at Sagell and Co by telephone (+46 8 611 55 42) or email ([email protected]). The Sagell and Co website can be accessed at www.saglaw.se.
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