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Expert Advice: Brian Bond | Strategic Business Brokers Group
Seven Ways to Position Your
Franchise for Sale ensure that potential buyers are valuing your business properly. Here are a few tips to perfectly position your franchise for sale.
Let your Franchisor Know and Understand your Franchise Agreement
Brian Bond
Creating a successful franchise operation is not an easy task. You spend years as a franchisee building up your operation to the point that it has become a profitable venture. Now you are ready to step back from your franchise and move on to other things. However, you don’t want to leave your franchise without selling it for the best price. Selling your franchise can be a complex process and things can go wrong if you are not prepared. There are steps you can take to make the process easier and
Franchising USA
Before you try to sell your franchise it is important to reach out to your franchisor and let them know you are interested in selling. Your franchisor has a vested interest in who you sell your business to and they will have basic requirements for who you can sell the franchise to. It is vitally important that you understand your franchise agreement front to back. This agreement will lay out any types of transfer fees you owe, what type of buyer is eligible to purchase your business and can even outline remodels you may need to make before you sell your business. More importantly, your franchise agreement might give your franchisor the right of first refusal, meaning they have the right to buy the franchise back from you first before you can put it on the market for outside buyers. Overlooking the franchise agreement is a common mistake we see many franchisees make. Understand every inch of your franchise agreement before you sell because the finer details of that agreement could dictate if you want to sell or not.
“Maintaining a high-quality franchise while you position a sale is key to getting the most for your franchise.�
Financials in Order A franchise owner serious about selling should make every effort to keep their books in order. Your records should contain accurate profit and loss statements, balance sheets and corresponding tax returns. Being up to date on basic financials is essential and will make things easier for you, the buyer and the franchisor. Additionally, a franchise owner whose books are in order will receive an accurate valuation of the operations value and ultimately lead to a more accurate valuation of your franchise.
Maintain your Equipment Maintaining a high-quality franchise while you position a sale is key to getting the most for your franchise. Make sure the the equipment required to operate the business are well maintained and in good working condition. Similar to books and records, keep your service receipts to show your assets have been maintained to increase your chances with potential buyers. If something is broken, then make sure it
