This article are provided for information purposes only, and are not intended as legal advice.


Buying a business – looking at a bigger picture

August 11th, 2009

An investor was looking to buy a franchise, an American concept just starting to come to Canada.  He did not have enough money to buy the franchises and needed an additional investor to help buy one franchise.  The business broker reviewed the situation and recommended that the Canadian rights be set up as a master franchise in Canada and as compensation, this investor would get a reduction in the fees for allowing the broker to sell the master franchise.  The investor won, the US company won.  It was a win win situation.   The broker had an ideal investor to purchase the master franchise.

 

How do you bring a concept to a country and convince your customers that they need the service that you are about to provide them?  That is what this concept does.  Basically, you can maintain the item which is in every company or replace it every 10 years.  The issue will be to convince the customer that they need something that they never even contemplated before and over the long term, they would be able to avoid the costs renovations.

 

The purpose of this blog is to state that when you look at an opportunity, do not look at it a face value, look at the bigger picture.  Would it be a better deal if this idea was merged with another concept so that the supplier can tap into an existing customer base and sell the existing customers  more products?  This builds up the franchise very quickly.   Basically, I want to add 2 plus 2 and get 10.  That is what this broker is negotiating.  All the parties acknowledge that it is every one’s best interest to work together to come up with a solution.  No one has determined what the final solution should be however the parties realize that by continuing to discuss opportunities, the large investor, the small investor and the US franchise can put together a strong business in Canada and control the market.  They have a revolutionary concept which will save companies money and break down the current system of servicing those customers.  Some types of businesses are done on a buddy system, if your buddy controls the contract, you get the business.  If the new concept breaks the method that people can do business, you will have a very viable business.


Filed under: Buy a business — Gary Landa @ 1:23 pm


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