Searching and buying a tourist business in France

Let’s say you are considering the purchase of a holiday venue in France. Something we call a ‘gîte’ but the French authorities officially call a ‘meublé de tourisme’ (furnished tourist home) This wish inevitably brings up a couple of questions. Which is better? To buy a normal home, mansion or farm and do some building work to create a guesthouse or holiday rental home exactly as you imagine it? Or should you buy an existing gîte business already used for holiday rental? Sometimes, the question does not even arise, simply because you fall in love with a building and the spot it is sitting in. You could not care less whether it is already a business: you want to live there! But when you are still searching it is something you might want to consider. If only to help you choose a certain research strategy and narrow the field. Whichever you choose, you need not be afraid of the legal implications or other risks buying a business in France. The French law does a very good job protecting the buyer.


Buying an existing tourist business
I you are certain that you’ll be using the intended purchase as a tourist business, it might be clever to consider buying an existing business. The advantages being that the previous owner will have done a lot of the groundwork for you. The gîtes will already have a reputation, there’s a commercial website, it will be featured on most important holiday rental sites and of course you can benefit from the existing client base. Furthermore, in most cases the business will be sold fully furnished, so you can start earning money right away. You will need less reserve buffer.


The buying process of a French business
If you buy, the French law actually considers that you are buying two separate items: the ‘murs’, being the actual building and the grounds. And the ‘fonds de commerce’: the business. For the ‘murs’ there is no surprises. This is just like buying any other property in France, with the same ‘caveat emptor’. For the purchase of the business (session de fonds de commerce) however, the rules are aplenty and very strict. The seller will have to give full disclosure at the notaries, including a complete description of the activities and revenues, so the contract can contain all the information that might be important for your future success. Because finally, you are buying something very insubstantial: earning potential!


What does the seller have to disclose?
The law demands a certified accountants report over the last three years of the business. This report gives you full insight in the success of the company. Was there a profit? What was the occupancy rate? The average price earned per week? What are the running costs? And even: is there a probability the owner has received income that he has omitted to declare and can you expect a little more than the papers show? As you see, if you want to buy a business in France the law is a 100% behind you.


Goal oriented search for ‘tourist business France’
In any case, before you need to worry about the buying process, you’d have to find the right property first! If you go on a site like Immogo, you can search with key words like ‘holiday home’, ‘gîte’ or ‘tourist business‘ and come up with an attractive list of possible venues. Or use certain hobbies. For instance, there are several properties with (carp) fishing or equestrian possibilities, or equestrian. The advantage of an international site showing private sellers offers is you don’t have to pay the property agents fees. And of course there are many English and Dutch (English speaking) owners, which makes the whole process so much easier.


Ask advise from the professionals
If you are starting the buying process and have questions about the legal system and the process, don’t hesitate to ask a professional. Like the Dutch company ‘Compromis-de-vente.info’ who has helped many Dutch and English clients buy or start a business in France and who can help you check the preliminary deed (compromis de vente) to make certain there are no untoward clauses or mistakes.


Originally published here.

Practically all "B and B's" in this area in Brittany seem to be very half hearted affairs and many of the owners have sold up after a short number of years, many going back to the UK. I'm staggered by the number of people who buy in but don't do their research at all. House rental seems easier but the season is very short and there are very few off season lettings. If it's an investment you want there are far better ones, even in today's economic crisis. I get the impression that many aren't properly registered either.

Quintity is not the answer.....in my mind.

Quality

Just chatted to my OH who sniggered amd told me about yesterday's punters. They want six to eight gîtes but the money they have would stretch to four at most in line with their requirements. The gîtes had to be with no near neighbours by which they meant nobody within eyeshot and preferably a couple of kilometres away, possibly with paddocks for a couple of ponies. They had come directly from the airport to hotel to first visits, so no other agents beforehand. When my wife started to tell them about the four gîtes they were visiting as the closest to their requirements they first of all did not believe the fosse septique business saying that they had 'heard' that most of France is already on mains and as for getting them checked and perhaps changed they snorted down their noses. My OH was only being honest given how imprecise many of the 'surveys' are. Then there were questions about a cleaning lady who speaks English, etc... She is not expecting to hear back from them...

We bought our property with the idea of doing exactly what we are now doing.

We have been in hospitality in uk for years but wanted to take the thing to

the ultimate stage.....make everything fab.

Open space for clients to explore....A garden to dine in and enjoy breakfast.

A truely beautiful area and a lovely house.

I set up re-location en vacation and am working at ways to promote

it and bring to to those who will benefit by it.

It is an exciting project designed to help many peopleejoy life and make a liiving.
The biggest problem which I have come across.....has just become solvable.

Amazing .....


A

Right Simon, in fact most of my wife's client are French and she would agree there, however she gets a fair scattering of English folk who want early retirement with a house in France and a nice little earner on the side. Issues like Sheila's temperament question and Janet's Basil Fawltys do show up more often than people might wish. Suggest more than two gîtes and they blanch, they are not really prepared to do that amount of work themselves in later years. Somebody in the next commune where we have put visiting relatives has just recently taken down her sign. When I met her at the local market and asked she said she wished her husband and she had never started up. Before this bad year she was doing well, but I imagine age, lack of reserve funds and so on got the better of that business. Psychological pressure is right Gregor but in many more ways than most of us probably imagine. We have found it very tough ourselves with far too little work and within our field are people who one can google and see some of our work, not like a gîte that is just one of many thousands.

The friend who inspired me to write this article, Wim van Teeffelen, does workshops for future gîte owners, explaining them exactly what is awaiting them. Administration, the possibility of joining 'gîtes de france' and the rules they set. But also the psychological pressure of having to find clients and - once found - dealing with them.

As the former owner of Immogo.com and of the blog hollandais.en-france.nl I'm pretty much at home on the different Dutch forums (or do you say fora like we do?) I've seen hundreds of people flying in blindly on their dream and crashing it against the sharp cliffs of reality.

Article I published on SFN earlier says it all: http://www.survivefrance.com/profiles/blogs/thinking-about-starting-a-camp

Sheila, the failure rate in your neck of the woods (Aude) is extremely high. 'Gites-de-France' figures tell us that the average B&B set up by non-French people lasts for 18 months. Not even two years. And this because the owners find out - very quickly - that they just can't stand having strangers hanging out in their sitting room, playing their CDs or just mooching around their garden. Running a gîte can be done by any old amateur ... but running a B&B is reserved for people who actually like other people or who have a background in the hospitality business.

Brian, as 95% of my buyers are French I don't get too much in the way of dreamers: these are people who are much more worried about flooding/drought/proximity of schools etc. They know that there's a market for gites but they just can't understand how the Brits are willing to pay so much to stay in conditions that the French would not accept!

Good advice here. It occurred to me that another aspect to consider would be "am I suited to running a gite/B&B?". Not everyone has the temperament/people skills etc. Just a thought.

Yes Simon, but I bet you get a fair share of 'new ideas' people who are only proposing to re-invent the wheel and start from scratch. My wife despairs for them. The others, as you say, should be fine if the business is at least viable.

I think that buying a gite business as a 'going-concern' is a much better deal than starting from scratch. You have a set of accounts, past performance, reservations already in for next year plus, often, a working website. Plus all the legwork has already been done getting the place listed in various guidebooks and on websites.

Look at the facts: I have about ten such gite/B&B properties on my books at the moment and nearly all of them offer incomes amounting to between 8 and 12% of purchase price. Whereas properties with "gite or B&B potentiel" will need two years hard graft before they are earning.

My OH is part time estate agencing and there are probably far too many potential gîte seekers. They want prices well below what they are, have unrealistic budgets for modernisations and renovations and no idea about any kind of regulations from septic tanks to taxes and insurances and back round the block again. It is a time for caution rather than too much enterprise so if it is taken slowly perhaps but haste must be discouraged entirely. That is what far too many of the potential buyers suffer badly because of believing the market is wide open right now. Here in Dordogneshire the year was mostly bad, so taking that as a model alone I would not be potentially throwing money at a business unless I had perfect French, good notaire and lawyer nearby, etc, plus money to spare for a potential bail out.

Yes there's a weeks training and a whole load of conditions on being accepted by the douanes. My OH's sister and brother in law have a tabac-presse and a presse-librairie so we're up to speed on what's needed. Yep socially active but it's more a case of needing to change direction - looks like my OH's school will close at the end of the year and my Uni are becoming almost 100% against taking in on AE vacataires (I was a prestataire de service but they won't accept me aan AE at all under that statue now!)

But you're right. In many of those 'under the sun'-programmes, the main difficulty was getting things built. Every time, you see people buying as cheap as possible. And then getting into trouble because they do not have any income as long as the construction is not finished.

It seems there is rather a stiff exam involved in the tabac-sales. But I know some Dutch people who actually run one. Great way to get socially active in a village.

Nice one Gregor, I think a lot of people overlook the years of renovation/conversion and time it takes to build a business. Buying one "off the peg" could in many situations be a much better idea (I'm currently looking at tabac-presse-librairie type businesses here in the south)

à+