FRANCHISE APPRAISALS by JR's CERTIFIED APPRAISALS
Franchise appraisals
"Where Informed Decisions Begin"

FRANCHISE APPRAISAL SERVICE

Member of the Canadian Franchise Association

Your franchise appraisal requirements may include a Fair Market Valuation (FMV) of equipment and leasehold improvements, or a Going Concern Value (GCV) based on cash flow and net income.

If financing is required, it may be desirable to obtain a combination of these two types of appraisals into one report.  In some cases, a franchise could be very lucrative with a large cash flow and a very healthy profit.  This could enhance the value of this business on a Going Concern basis far exceeding the Fair Market Valuation (FMV) of equipment and leasehold improvements.  In such a scenario, the FMV of the assets is secondary, as the cash flow is the main selling point.

This would not be appropriate when purchasing a new franchise since the cash flow has not yet been proven.  In this case, all equipment would probably be new and purchased from that particular franchiser.  When purchasing an established franchise outlet, past financial statements should be readily available to determine cash flow, and because all equipment and leasehold improvements are in place, such a business could be an attractive alternative to a new outlet.

Whatever your requirements, before progressing further, call for a free consultation.