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Selling a Franchise How to

Written by: Ian Macleod

Article Overview: You’ve worked to make your franchise a success, and now want to sell. Here is what you’ll need to do. Maybe you’ve decided to try something else, of you’ve built your business into such a success that offers to buy it flow in faster than your customers. No matter your reasons, selling a franchise is a common situation, but it isn’t always simple. You may have to jump through a lot of hoops to get the deal you want, and you’ll have to make sure you get all the money you deserve. Here is what you need to know:

Selling a Franchise How to

HOW DO I SELL MY FRANCHISE?

You’ve worked to make your franchise a success, and now want to sell. Here is what you’ll need to do.

Maybe you’ve decided to try something else, of you’ve built your business into such a success that offers to buy it flow in faster than your customers. No matter your reasons, selling a franchise is a common situation, but it isn’t always simple. You may have to jump through a lot of hoops to get the deal you want, and you’ll have to make sure you get all the money you deserve. Here is what you need to know:

1. What does the agreement say? The first thing you should do when considering selling your business is consult your franchise agreement. This document serves as the basis of your business, and they often include specific guidelines in the event of a subsequent sale. Comb through your agreement to make sure you know exactly what it says, and what you can or cannot do when selling to a new party.

2. Talk to your franchiser. Whenever a franchisee wants to sell their business, one of the best things they can do is talk to the franchiser. Not only will they want to make sure you comply with the rules, but they may be able to offer you a better deal. When a successful franchisee wants to sell a business, it’s usually in the franchiser’s best interest to find a strong buyer. By telling your franchiser, you may be opening the door to more bidders willing to pay more money.

3. How valuable is the business? You’ve spent a lot of time, money and effort building your business and it’s only appropriate that you get compensated for your work. Coming up with the right sales price can be challenging. Don’t just jump at the first offer you get, even if you think it is incredibly high. The bidder may know something about your business you aren’t seeing, and their price may turn out to be lower than what you can get. Research your market, find a business consultant to evaluate the franchise for you or otherwise ensure you know what you are selling. Nothing is worse than selling your business and finding out later you sold too quickly and asked for too little.

4. Be willing to help. Just like you, someone who wants to buy your franchise is doing so because they like the idea of owning an already established business that offers a lot of help to new owners. Selling your franchise may involve a little more work on your part, but it is worth it. Make sure potential buyers know you will be there to aid them in the initial stages. Be open to answering their questions, helping them work-through the details and even work alongside them to walk them through their baby-steps. Franchise owners like the idea of a safety net, and they are willing to pay for it. By providing assistance, you’ll be able to get more from the sale.

Related Articles
  Reselling Your Franchise
  What is Franchising
  Franchising with all its Success
  Selling Your Franchise: What Are Your Rights?
  About 60% of all franchise opportunities have less than 50 units.

Article Tags: best interest, bidders, business consultant, comb, franchise agreement, franchisee, franchiser, hoops, selling your business, time money



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


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