When you buy a business you buy more than the stock or the right to sell products out of an existing shop. You are generally buying the IP and other intangible assets of the firm.

There are many ways to value IP, and given the complexity of valuation, someone with accounting and IP expertise will be required. Make sure your accountant, business adviser or lawyer has experience in the valuation and management of IP.

Businesses such as McDonald’s, Dymocks bookshops and Eagle Boys Pizza have made the word “franchise” a household term. Simply, when a successful business wants to expand its operation without borrowing capital to develop, they license their IP to franchisees.