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Buying a Business in France

How to go about buying a business in France and what needs to be considered

Seeking an income in France

You have decided to move to France, but you need to establish an income to sustain your new life in the sun. Unless you have a skill which is difficult to find among the local population and for which there is an established need in the part of France you hope to move to, finding salaried employment is very difficult (Jobs in France, Working in France). Many ex-pats go down the road of setting up their own businesses from scratch, which works well for many, but which also carries a risk element (the business is not yet tried and tested) and can also take quite a long time to bring in a regular income of sufficient size.

Commuting is an option for some

Some people choose to commute between the UK and France, again an idea that can suit some ex-pats but which clearly limits the time you can spend in your new home and involves the hassle of frequent travelling (Travel France). If neither of these options seems to fit your needs, why not consider the possibility of buying an established business?

To buy or not to buy

That is the question. Purchasing an established business in France can be an excellent solution, but there pitfalls along the way for those who may not have done their homework. Businesses in France do not necessarily run the same way in France as in the UK, and certainly there is more red tape and paper work than you will have been used to. Bureaucracy is not a French word for nothing! However, the upside of buying a business is that you already have the clientele base, you know the sort of incomings and outgoings to expect and you have an already established framework in which to operate as soon as you arrive in your new home.

Businesses for sale in France - small and friendly

The majority of people looking to purchase a business look to the small and friendly sector of the holiday industry first. Popular choices among small business purchases are B&B establishments, gîtes (Gîtes for sale), caravan sites, cafés, bars and restaurants. Others look to the sports and leisure side of the tourist industry, with businesses including fishing lakes (The Best Lakes for Sale in France - September 2011), horse-riding stables, llama farms and similar.

Personal experience is second to none

There is no substitute for personal experience of your chosen sector or business before you sign on the dotted line, so spend as much time as possible helping out in the business, talking to existing clients and generally picking the owner's brains. In a small business, personal relationships with clients are vital, and getting to know the clientele will teach you more than you will ever learn from a book or pamphlet.

Buying a gîte or a chambre d'hôte ( B&B )

By far the most popular businesses for ex-pats to purchase are still gîtes and chambre d'hôtes. There is no need to have previous experience of these businesses in order to make a success of them, especially if the business you buy is already proven and has bookings for the year ahead. However, it is important to do the maths and to take into account the possible expenses and pitfalls in store. (Owning Gîtes and Chambres d'Hôtes (B&Bs) in France.)

Be realistic about earning potential

One gîte is unlikely to generate enough income for a family to live on, and the market can fluctuate with fierce competition in a well established sector. To obtain a realistic income you should consider a minimum of three successful gîtes, or a B&B business with an all year round appeal. Gîtes are by nature seasonal in most cases, and you need to be sure that you can fill your properties throughout the appropriate season to allow for the leaner times that are part and parcel of this type of enterprise.

Location is important

A seaside property is likely to be busy only in summer, with a season running from May until the end of October at best, while other areas may offer more scope. For example, a chalet in a ski resort will see its busiest times in the winter, but if you buy in a resort that has an established summer holiday reputation, you will be in a stronger position to keep earning after the snow has gone. B&B businesses often do a year round trade if they are situated in a town or on a main road rather than buried in the (admittedly prettier) countryside where there is no passing trade.

Buying a restaurant or café in France

Probably the next most favoured choice is the purchase of a bar/restaurant or café. There are many successful businesses of this type being run in France by ex-pats, but as is so often the case, location is key. In many rural areas, restaurants run by the British are viewed with suspicion by the French, who have a rather poor opinion of British cooking abilities at best! You may wish to prove them wrong (Buying and cooking French food), or to fulfil the dream of teaching the locals that a fish and chip shop or a vegetarian restaurant can serve just as delicious food as a traditional French meat based one can, but it may take you quite some time to convince the locals that it is even worth a try! That said, in areas such as the Dordogne (Dordogne Property Guide), where British ex-pats almost outnumber the French, such businesses can attract a lot of customers eager to rediscover the lost pleasures of their homeland.

Bar opening hours

In the case of bars, it is again important to get to know your area, as bars in France can operate quite differently from those in the UK. Most do the majority of their business during daylight hours, and many close completely during winter evenings for the perfectly good reason that there are no customers on cold, dark nights.

How to buy a bigger company in France

Of course, it is possible to buy a larger company, and there are opportunities to do just this in France. The advantages of this include having a settled workforce who know the ropes before you begin, and a reputation and client base already well established. Unless you are particularly well versed in French business law and practice, however, it will be necessary to use the services of an organisation in your chosen area such as UCCIMAC (Union Chamber of Commerce in Massif Central), which covers the regions of Auvergne (Auvergne Property Guide), Burgundy (Burgundy Property Guide), Languedoc-Roussillon (Languedoc-Roussillon Property Guide), Limousin (Limousin Property Guide), Midi-Pyrénées (Midi-Pyrénées Property Guide) and Rhône-Alpes (Rhône-Alpes Property Guide).

What UCCIMAC provides

This organisation, and others like it, can guide you through the process, from finding the right business to getting onto training courses, registering your new details with the correct bodies for taxation (Tax in France) and other legal requirements. They can also help you with contacts, such as lawyers, complementary services and businesses, potential new clients and more. Larger companies or businesses you may consider include hotels, campsites (Buying a campsite in France), shops and industries.

How to find a business for sale in France

Businesses for sale in France can by found by searching the internet, using websites such as this one, looking through national and local papers and property papers, attending property fairs and events in the UK and France, using organisations such as UCCIMAC mentioned above, and of course through word of mouth.

Find out exactly what is included in the sale

When looking for your potential business, you will see many advertised as "Fonds de Commerce". This is simply to say that what is being sold is the commercial business, ie: the clientele and goodwill, and not the property itself, which is known as the "Murs" or walls. Stock and tools/equipment are often sold separately, or may not be for sale at all, so it is vital to establish exactly what is included in the price. Businesses may also be sold as leasehold only so look out for "cession de bail".

A business with property attached

If your purchase includes the property (Buying a French Property - The Fees), the process of the bricks and mortar is the same as for any house sale in France, with the initial and binding (with exceptions possible if agreed in advance) promise to buy and the payment of a deposit (usually 10%) before the completion of the sale (Property sales in France). The single most essential person to have on your team during this process of buying is a good Notaire who will draw up the sale documents and ensure that the purchase is registered with the correct authorities and tax bodies.

Use a solicitor to protect your interests

However, to fully protect your interests you will also need an expert solicitor who can also advise you on matters such as the need for the inclusion of clauses to prevent the seller from starting a similar business in the vicinity, or other potential hazards.

Qualifications will be necessary in some cases

French law dictates that if you are purchasing a business where certain skills are required (for example, a hairdressing or a building business), you will need a qualification in those skills. In France, you will be required to produce certificates and attestations to prove these, so be sure to have everything in place before the purchase.

Legal obligation to employ existing workforce

Be aware too, that if you are buying a business which has an established workforce, you will have a legal obligation (in most cases) to continue their employment.

Important matters to check out

Matters you must consider in advance of any purchase also include checking out what insurance policies you will need, what taxation you will be liable for, and whether there are any outstanding debts or liabilities. You must also find out if there is any opposition to the sale of the business or to the existence of the business, and what restrictions, if any, may be in place on the property or business. In the latter case, these may include restrictions on what you can do with the building, as in the case of it being listed as of historical importance, for example, or on hours of operation.

Seek expert advice

So it makes sense to take expert advice on all aspects of your purchase to avoid problems. Certainly, if you do not speak French fluently, and are not able to absolutely understand the legal terms in documents, you will need a good translator or bi-lingual lawyer.

Additional articles which may be of interest:

The Best Chateaux on the Market in 2011
Equestrian property in France
Letting property in France
Learning French

About the author

Joanna Simm moved to the Languedoc area of south-west France in October 2004 having found her property through French Property Links.

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