Useful Advice for Selling a Franchise


Owning and running a franchise can be a tough pursuit. Sure, much of the groundwork was laid already, but you still have to run and operate a business, which is hard for anyone. So, if you are ready to retire or if you are looking for a way to move out of the franchise world, it may be time to sell. Indeed, selling a franchise is a little more difficult than purchasing one – mainly because you have so many hurdles to jump over. Not only do you want to get your money’s worth – you also want to make a clean break. This is especially important if you have partners. Here is some useful advice for selling a franchise.

First and foremost, you want to start early. Selling a franchise on the resale market takes a lot of time. Not only do you have to break with the parent company, but you also have to open the market for buyers. In some cases, it may take a full two years for a buyer to come along. In most cases, buyers will visit Franchise Expo and purchase a brand new franchise. However, there may be a buyer that wants to have everything set up already.

Also, it is critical that you value your franchise accordingly. You can’t simply throw a number on the value of your business – you have to think about all the costs you incur, you have to think about your equity and you have to think about future valuations. What if the company makes another franchisee millions of dollars – you could be out of the loop by then and thus out of that money. So, you want to include all these factors in the final sale price. Ideally, you want to get the most out of your franchise, but you also want to be fair.

Next, you want to make sure that you maintain your relationship with the franchisor. If you have a strained relationship with your franchisor, you want to repair that bridge before a new owner walks on it. The last thing you want is to get sued for not being totally honest. So, instead of botching the sale, try and mend the relationship. If this issue has to do with management or sales, you can ensure that you are looking for a new buyer that can do a better job with the franchise. Ideally, you want to start mending that relationship far before you put your franchise on the market.

Lastly, one of the best pieces of advice is to link up with a broker. A broker will be your strongest ally in the sale of your franchise. If you don’t have a broker, it will be very hard to efficiently close a sale and say goodbye to the business you build. Also, without a broker, you may not get the most out of your franchise. So, be sure to look for brokers that specialize in franchise resale. Meet with a few brokers. Once you feel comfortable with one and you agree to terms, you can then pursue the sale process.


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