Selling Your Franchise

It may seem odd to review selling your franchise before you purchased one. We suggest to people when meeting for the first time to start with the end in mind. What are your long-term plans? Are you looking to sell and fund your retirement, leaving a legacy for your children, run the business into retirement and hire a full-time general manager so you can have the best of both. Keep in mind that you have created an asset that generates cash to support you and your family. This is an asset that others want to own.

What is the Resale Value?

There are types of business that have greater resale value than others. You may want to include that as part of your criteria when starting your research into franchises. A business that has a proven system and that a new buyer can learn easily is a plus when you go to sell. One that requires special skills or knowledge limits the number of buyers. Businesses with repeating revenue streams are easier to sell. Businesses with good, clean accounting books and records are easier to sell. These should be all part of your initial research when deciding which business to purchase.

Timing is Critical

The timing of when you want to sell is also critical. If the economy is strong and interest rates are low, that is an excellent time to sell. If the economy is headed into a recession and interest rates are increasing, that may hurt your sales price. If your sales and profits have been increasing for the last five years, that is also an excellent time to sell. If your sales and profits have been slipping for the last few years, then you may not get the price you were hoping for. The trend can be your friend or your worst enemy. There are right times and wrong times to sell a business and you need to be aware of that.

Who Are the Buyers?

Who are the buyers of existing franchises: why are they willing to pay a premium for that business. The number one buyer of your franchise is another franchisee in that system. It may be the franchise in the neighboring territory who would like to expand and nothing is available. It could be a corporate executive who is burnt out from the politics of the big company and now wants to control their own destiny. There are many buyers out there and you need to find the one who is right for you.

We have helped people sell their franchise when they are ready. We have been doing this for twenty-eight years and have helped hundreds of people find success in either buying or selling a business. Give me a call, email, or text me, I would love to chat with you and help you figure out if a franchise is a possibility for you.