Selling a franchise and having an exit strategy
Selling your franchiseIt’s probably the furthest thing from your mind but planning your exit should begin the moment you take over your new franchise. Whether it’s planned or unplanned, there will come a time for you to hand over the keys someone else – it could be to the next generation or a new buyer.
Selling a franchise requires just as much thought as buying a franchise. Is selling the right decision? When is the right time? Will anyone buy it? What can I do to get the best price? There’s a lot to consider.
Luckily, franchise owners have some advantages when it comes time to sell. One of these is that most likely your business will have been subject to monitoring and audit by the franchisor, which means your books should be in good shape. Potential buyers will have more certainty around revenues and expenses, and more opportunity to do their due diligence. This will help you get your best price.
In addition, franchise owners have the advantage of the franchisor, who wants a smooth transition just as much as you do. Being part of a network of franchisees also provides a sort of marketplace for potential buyers – other franchisees might be interested in taking on more territory or expanding their business.
Some other things to consider include:• Why are you selling? This is often one of the first questions a potential buyer will ask – the key is to be prepared for this question.
• Is this the right time to sell? The best time to sell a business is when it is thriving, but often things just don’t work out that way. Prepare your franchise for sale by settling as many outstanding issues as possible.
• What is your exit strategy? Will you be available to the new buyer for a period of time? Or would you rather sell up then walk away? Do you want to pass your franchise on to a family member or are you looking for a new buyer? These are the sorts of things you should include in your exit strategy.
• What will you do after you’ve sold? Put some thought into your future plans before your future arrives, otherwise you’ll be left twiddling your thumbs.
Selling your franchise is a huge milestone. Careful planning and preparation will ensure you get a good price, a smooth transition and an exciting new start.For more on selling your franchise see selling a franchise.
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