MAXIMIZING THE SALE Pro tips on making the best deal Written By Helen Bond
O
ver multi-brand veteran Bill Byrd’s long career of buying franchise operations, he’s learned what it takes to maximize a sale by watching all the ways deals go wrong.
“I can’t tell you how many times we have gone in and tried to buy someone out where the seller had to reinvest so much money in their operation that they weren’t going to walk away with any money,” says Byrd, president and co-owner of PMTD Restaurants. “In a couple of instances, I convinced the owners to get in there and make their restaurants look like something that somebody would want to buy to get a higher price,” he says. “We’ve had situations where people have gotten themselves in good shape, and then the restaurants were too expensive for me to buy. But they were able to sell to somebody else. And, I’m okay with that. It isn’t all about how I can buy your restaurant as cheaply as possible. I want to give you a fair price, and I want to be able to make it a win-win situation.” Selling a business, no matter the reason, requires a thoughtful strategy and detailed preparation. Waiting too long to sell after you’ve stepped back from the company, poor planning, or an inaccurate financial picture are just a few of the obstacles to earning a higher reward for all your hard work. The path to the best price—and often a quicker sale—means putting your best foot forward from the start. “I think you should operate your business with the mindset that, at any time, you can sell,” says serial entrepreneur Doug Pak, a franchisee of 72 Papa John’s. “You don’t have to sell, but it means you are always operating in a mode of maximizing your sales, your people, the quality of the assets, and your profits.” Reputable professionals can also help determine valuation and open the doors to the best avenue for selling. When multi-unit Dunkin’ franchisee Karim Khoja was ready for a lifestyle change in 2017, the power of the brand he grew up in paid off—quickly. “When the email hit the community, we had 100 inquires within 24 hours,” says Khoja, now chairman and president of Bravo Hospitality Group, a multi-unit hotel franchise company. To help him get the job done, the Chicago-area entrepreneur looked to a “great franchisee attorney and a great franchisee broker team.” “Without those two groups, it would have been almost impossible for me to get everything organized,” says Khoja. “Most people forget to do that and think they are superhumans who can do it all. But for me, running 67 stores with no partners and a huge infrastructure of 1,100 to 1,200 employees was a big task. Now you put the pressure of selling the business on top of that, and it doesn’t work. You need to hire outside counsel and advisors to help manage that process. It was not cheap. I paid top dollar, but it was well worth it at the end of the day.”
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Multi-Unit Franchisee
ISSUE 4, 2020
