Preparing to Sell Your Franchise

Are you thinking about selling your franchise business? If you say, “Hey Kelli, I've been at it for 5-10 years. I've really loved it, but I'm really ready to move on and do other things with my life.” That's totally okay. But here's the thing, you have to make sure you have every single duck in a row before you put your business up for sale, and I will tell you why.?

Understanding Your Motivation: Why Are You Selling?

First of all, you have to face the hard facts of why you want to sell your business. This could be financial. This could also be emotional and driven by the lifestyle that you have versus a lifestyle that you want. When it comes to selling, you need to be very convinced on why you're selling the business, because there's going to come a point where it does get emotional, and you'll need to be steady and go back to your why in the first place.?

Reviewing Leases and Contracts

Another thing that you need to do before you sell your franchise business is to track down the lease that you have and get an understanding of what long-term contracts are in place in your business. The potential buyer is going to be looking for those things to see what outstanding liabilities that they have to take over when they purchase your franchise business.?

How to Present a Profitable Business to Buyers

And, oh my goodness, please clean up your profit and loss statement!! Your P&L cannot have your children's cars in it, all the times you go to the barbershop or salon, or for that vacation, because it really works against you when making a compelling business case to show that the business is showing a strong cash flow and profitability. I would even say one to two years before you're ready to sell, start developing proper P&L’s that backs out unrelated expenses to reflect the true performance of your business. Otherwise, you will be selling your business at an undervalued price.?

If you don't do these things, you're going to lose credibility with the buyer from day one when they ask for P&Ls and other financial statements. So if you really want to put your best foot forward in selling your franchise business, make sure to get those ducks in a row.