The test of a mature franchise: Horwath Franchising has conducted in-depth research into the explosive growth of the resales market. Here, Horwath's Paul Monaghan reveals some surprising conclusions.(Franchise Resales)

FOR A NUMBER OF YEARS the NatWest/BFA survey of franchising has identified the growing maturity of the sector and along with this an increase in the number of franchised units changing hands. However, practical experience and anecdotal evidence has suggested that not all franchisors have made plans for this increase in the number of franchisees who are likely to want to dispose of their franchise.

Horwath Franchising has recently completed a survey of resale activity among a cross-section of franchisors. We have found that franchisors are currently experiencing franchisee turnover at an average level of around 10-12 per cent. However, the research also shows that they are expecting this to rise by some 70 per cent over the next three years--which represents an increase of 150 per cent over the figures quoted for 2000. At a recent discussion forum a leading franchise lawyer suggested that the …