[Hilton]

My friends nephew is looking at buying out an existing Rainbow Franchise,

I know of them but not much about them other than they do a bundle of Insurance related work along the lines of Servicemaster Chem Dry etc

Has/is anyone a Rainbow franchise,can you recommend them etc I know in a national organisation there are going to be gripes and moans always is, its quite a chunk of cash he and his partner are looking to shelve out although the franchise does look pretty profitable.

He's no mug but I thought I would ask the question...

[John Kelly]

Be very carefull. My mate was looking at doing the same. The books looked great but they were from the previous year and included major flooding, current workload was crap. Also they have, I believe obtained some contracts recently on which the rates are rediculously low.
A number of fire & flood franchises have gone bust lately. There are companies now who obtain insurance claims, send a surveyor out to price up the damage then send a report to the insurance company. So if the damage amounts to £20,000 they are then offering to cash settle at £15,000. Most people jump at the chance because they are not aware of the actual extent of the damage. The ones that don't then end up with the original surveying company doing the work. This has seriously dented the amount of work going out to fire & flood restoration companies.
If they are still interested they need to have a look at the current rates for the contracts in place now and the current state of the books, not historically as the previous few years have been quite busy. Ask why he's selling. If its a good enough area and there are just the two of them running it with maybe one or two technicians then it may be a profitable business but make sure they do their homework first especially getting down to the nitty gritty of how the business is doing now not last year. If he refuses to show them the current accounts then I would be minded to walk away.

[jasonl]

What John said ,, plus,,
Look at the asset values , is there much equipment? how much of the price is made up of goodwill ?

It is fairly easy to get training , buy kit and get onto one of the half dozen or so networks who give work out without any up front costs or need to conform to rigid franchise rules about van livery , type of kit used etc.  Of course they all add a % on to the end customer , but see how far you would get going direct to an insurer asking for work.

[CATMAN]

Tell him don't do it.

I ran one for 7 years, total nightmare, never been so miserable.

IT MAY LOOK GOOD ON PAPER, BUT BELIEVE ME DAY TO DAY, HE WILL REGRET IT.

Rainbow can be the most vicious of bullies, and they know they can be, it's your money.

Looking at some of them for sale, I know that their turnovers have dropped massivly.

Many I spoke too who had just come in when I was leaving were already regretting it.

Please tell him to walk.

[Hilton]

Many thanks for your replies,

Obviously you had some serious issues with them,why did it take seven years to get out ?

The chap concerned is well clued up he has started up run and sold two business's previously and currently runs another business.However you would have to assume that if a franchisee wants out the business it will not be running at the same intensity as it would if they were still enthused and growing.

He has been looking at this one because he wants to hit the ground running, this particular franchise for sale looks like it has potential for major growth. If there is anything untoward I am sure he will spot but I will pass on your comments,I dont actually think he intends to run it himself but I could be wrong.

[mark_roberts]

Jason

Whats networks are there for fire and flood work for guys like us?

thanks
Mark

[jasonl]

I will tell you  by email  jason@dry-fresh.co.uk