Finding the right buyer for your business

Dawn Engelbrecht with another happy business buyer

Whether franchisor or franchisee, when it’s time to sell the business you’ve cherished, talk to Link Business Brokers

If you’re looking to buy or sell a franchise, you’ll soon come across Link Business Brokers. Founded in Auckland in 1996, Link has expanded throughout NZ, Australia, Philippines and the United States, developing enviable expertise. We talked to Nick Stevens and Dawn Engelbrecht to find out what makes Link different.

‘The first thing you need to know is that we are a franchise ourselves, which means we really understand what franchisors want and need,’ says Nick, director of Link and himself a business broker. ‘Since I joined the company over 20 years ago, I’ve worked with franchisors to help them buy and sell whole systems, as well as individual franchise sales and re-sales.’

Dawn also has real experience, having built the hugely successful sKids before- and after-school childcare brand to over 160 franchised locations around New Zealand before selling the business in 2019 and later joining Link as a broker. ‘You could say I’ve walked the walk that so many franchisors go through – I know what is involved both in recruiting individual franchisees and finding a suitable buyer to look after your franchisees when the time comes for you to sell.’

Selling a franchise system

Over the past three years, franchisors have been so busy helping their franchisees through the disruptions of Covid that many have put their own plans on hold. Now, they are ready to move on but want to ensure a smooth transition.

‘We understand that,’ says Dawn. ‘Every franchisor is concerned about their franchisees, their employees and the legacy they leave, and wants to ensure that whoever takes it on will grow the business and look after their people. At the same time, they want to maximise the return they get for all the effort they put in.’

Nick says that confidentiality is hugely important. ‘You don’t want to unsettle people with rumours and talk about selling, so 95 percent of the businesses we sell don’t want to sell openly.’

Instead, Link takes sellers through a careful process of analysis and preparation that enables them to find suitable buyers on a confidential basis. ‘Whether you are a franchisor selling a whole system, or a franchisee selling an individual outlet, we first do an appraisal on the business and where it sits in the market to help ensure a realistic valuation,’ explains Dawn. ‘Then we work with them to get all the pieces in place: legal and employment documentation, leases, agreements, contracts – all the things they need to have right for a buyer’s due diligence.

‘Without the support of a business broker it can be a huge and stressful time, which is why we are there every step of the way throughout the whole process – which could take 3-12 months. The more we can help them prepare in advance, the better.’

Finding the right buyer

Finding the right buyer is a major part of what Link does, of course. ‘While many businesses change hands for under $1 million, our dedicated Enterprise division sells businesses such as established franchise systems up to $50 million or more,’ Nick says. ‘Buyers come from all sorts of backgrounds – corporates in related sectors, franchise groups looking to expand, experienced managers ready to run a business by themselves or together with colleagues, or returning ex-pats or immigrants.

‘Many of those groups may also be interested in master franchises, multi-unit opportunities or individual outlets, too. And then there are the traditional family business buyers – mums, dads, kids and siblings wanting to work together. It’s a question of reaching them.

‘In addition to advertising which could involve social, print and digital, Link has a database of over 250,000 buyers with criteria covering investment level, industry and location. That gives us a huge ability to reach people quickly and discreetly.’

Making finance possible

One of the biggest challenges is finance. ‘Buying a business is very different from buying a house, and getting the funding can be much more complicated,’ explains Nick.

‘That’s why we partner with Spring Loans, who specialise in business finance. By talking to potential buyers about their business plan, they understand how to structure a proposition properly to get the best terms. They will then go to three or four banks to help the buyers get finance and make the deal happen.

‘We have many examples where buyers were turned down for finance before asking Spring Loans for help, then being able to purchase their dream business after all. And, best of all, the service doesn’t cost the buyer or seller a thing.’

How can we help you?

Nick concludes, ‘For anyone looking to sell a business, master franchise or system, please contact us. Fees will vary according to the type of business, but there’s one thing that’s certain – we don’t get paid until we’ve done the deal.’

And former franchisor Dawn sums up. ‘After being a franchisor myself for so many years, there’s a reason I chose to join Link. The people are an absolute pleasure to work with, and the admin and marketing are first class. If you’re selling a business, call us.’

Advertiser Info

Link Business Brokers

www.linkbusiness.co.nz

Contact Dawn Engelbrecht

M 027 291 9904

dawn.engelbrecht@ linkbusiness.co.nz