Selling a Franchise Business
As a franchise owner, the day will come when you decide to move on and selling a franchise business will be on the cards. You've worked hard to build your franchise over the years, and you deserve to get your best price when it's time to sell.
Here are 5 suggestions to help you sell a franchise:
Inform your franchisor - as an existing franchisee intending to sell their business, you may be required, in accordance with your franchise agreement, to gain the prior approval of your franchisor for the purchaser of the business. Keep your franchisor informed about your plans to sell the franchise at the very beginning of the sales process, and ensure you comply with any rules that apply to the sale. Your franchisor might also be able to help you in selling your franchise.
Prepare your franchise for sale - To get your best price you will need to prepare your franchise for sale before you actually place it on the market. Ensure your business is in good shape, and that it looks a great proposition. Make sure all your records are in order, and your financial information reflects a profitable and well-run business. It may be necessary to notify key employees, and discuss this with the franchisor. It can be a good idea to receive accounting and legal advice from qualified and experienced franchising accountants and lawyers as you only get one shot at this.
Price your franchise to sell - Make sure you price your business right. What you feel its worth may not reflect what your franchise opportunity is actually worth on the market. Be prepared to negotiate. Check with your franchisor or franchise broker to find out how much other franchise resales have sold for, keeping in mind that location and profits are key pricing factors, and then set a fair price.
Profile your ideal buyer - When selling a franchise take time to identify who is most likely to buy your franchise - are they looking to be self-employed, a change of lifestyle, new immigrants into the country or those that have been made redundant and want a job. All have their own reasons for wanting to purchase a franchise, and will differ in what they are willing to pay. Check with your franchisor about any special qualifications that a buyer must meet to assist with the screening process.
Plan your marketing campaign - Understand or get advice on the market before you list your franchise for sale (if using a franchise broker they will help here). Investigate the best options for listing your franchise for sale. Talk to people who are likely to know buyers who are in the market, such as business advisors, trade groups and your franchisor. Consider running some classified ads and listing your franchise for sale on busy buyer targeted websites. Ensure you promote all the key benefits in your advertising copy and help perspective buyers with the offer of training and possibly financial assistance if appropriate.
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