Franchise valuation can be approached from two ways, one is as an owner of the franchise, also known as ‘Franchisor’. Second is as the ‘Franchisee’ who is basically the person who pays the money to the Franchisor for buying their franchise and managing, or even ‘Master Franchise’ who looks after the benefit of franchising by finding and matching the right franchisee.
Therefore, the purposes of this type of property valuation can be for example to know the value of the franchise in order to sell, franchise package management, to know the price of each franchise level or even master franchise who might want to know the total business value of the entire business. Franchise valuation can be done by using 2 valuation methods which are ‘Cost Approach’ and ‘Income Approach’ which the main factors to take into consideration are managing system, supply system, raw materials, and leasehold rights.
