The securest way of buying or selling a franchise

The securest way of buying or selling a franchise

Buying or selling a franchise usually involve unknown parties and can comprise sizable amounts, which poses transaction risk. There is a risk that buyers may lose the transaction value to a bogus seller who is misrepresenting what they are selling. Conversely, sellers may not receive the funds owing to them after the successful transfer of the business. This is where escrow comes in.

Whilst traditional instruments provide the transacting parties with a level of comfort, their weakness is that they are usually costly, complex to set up, and administrative intensive. Setting up a paper-based escrow account can take a couple of days, if not weeks.

FASA’s newest service provider member TradeSafe is a digital escrow solution provider backed by Standard Bank. The digital escrow solution acts as a legal arrangement in which the buyer’s funds are deposited for safekeeping with TradeSafe pending the completion of contractual obligations. Once the obligations have been met, TradeSafe will release the funds to the selling party. With more than R300 million in successful transactions processed, TradeSafe has proven that it protects all transacting parties by eliminating fraud, scams, and unpaid invoices – ensuring safe, secure, and successful transactions.

How to get started? Simply head over to tradesafe.co.za and sign up and verify your business account on our escrow platform. Voila…you are good to go.

And then what? Just create a transaction, specify the terms, upload supporting docs, and invite the other party (we will help you every step of the way). Once the other party has onboarded and accepted the terms, the contract is locked online, and the buyer is prompted to deposit the funds into the escrow account. (Standard Bank has management oversight of the escrow account.) Once the funds have been received, we will issue a guarantee letter to the selling party. This will give the seller the confidence to begin delivery of the business. Once ownership transfer has been confirmed, TradeSafe releases the funds to the seller the same day using Real Time Gross Settlement. Lastly, any price adjustments or amendments can easily be performed on the TradeSafe platform.

The platform can support multiple transaction structures namely milestone (progress payments) and drawdown transactions. TradeSafe can also pay multiple beneficiaries in a transaction involving more than two parties.

So, the next time you are buying or selling a franchise, consider an escrow account from TradeSafe. Doing the smart thing has never been easier.

For more information, visit TradeSafe or email support@tradesafe.co.za