kiwinow

We've been asked to consider buying what seems to be an established and successful franchise in Queensland. Obviously our accountant is examining it, but as it's way more money than we have in our back pockets the whole thing could founder because noone may lend us that amount of money.

Can anyone recommend a Queensland bank, finance company or financial advisor who we could run it past to see whether we could even think about borrowing the amount we'd need?

Are there any companies better for business money lending? Your expertise and advice would be appreciated.

ABCDiamond

The Bank of QLD have a good reputation for personal service.

Doesn't your accountant have some options for you on possible lenders ?

JAJ

Any particular reason why you would buy a franchise, rather than setting up an independent operation? (if you are experienced in the business)

kiwinow

He may when it comes to the crunch, but he is in NZ (as we are still) and knows that scene better than the Australian one. Just wondered.

JAJ - Large established client base, proven success, benefits of training and assistance. OH has experience in the field on a smaller scale and we have considered starting our own company, but starting from scratch means a few very uncertain years in a new country, and now may not be the best time to start a new opposition company.

JAJ

Things (highlighted) for which you pay a lot of money, either up-front and/or as a royalty. On top of that, most franchises restrict how you run your business and you bear the risk of any decline in the brand overall.

Sales out of franchised businesses will also decline in a recession.

I'm not saying don't do it, but anyone contemplating purchasing a business should look hard at the real value of the enterprise and the pros and cons of simply setting up on your own.

There are many cases where people buy a business that has little real value other than customer goodwill. Such goodwill does have some value, but not as much as many people think.

And as for purchasing a franchise, same issues apply and more, except that now you also need to ask is whether the fees and restrictions are really worth it. A lot of the success of franchises is linked to the success of the brand overall - in other words, if a brand is growing, then the existing franchisees will usually benefit with it.

Are you New Zealand citizens, or have you received your migration visas? If not, you will need to resolve this issue too.

kiwinow

Thanks for that. Yes, we will be considering all those things with the accountant over the next few days. We had no real intention of buying a franchise, buying or starting a business, but when things are put in front of you it's worth a look at them.

Yes, we are NZ citizens, so can live and work in Oz without problem. The biggest problem will probably be borrowing the money, which is why I was asking for advice on where to find out if it would even be possible.
The chances are high that it won't happen but we're looking at various options and this is one of them.