A franchise business draws many buyers due to its brand mane. Nonetheless, selling such a business is different from selling an independent enterprise. What’s more? The process of selling a franchise business has numerous benefits. There are various systems to follow, and it’s easier for clients to understand what you’re selling.
Check out easy steps to selling a franchise:
- Prepare for a sale
Contact a franchiser to help you with the sale transfer. The professional will guide you in most aspects of the sale and what you require for a successful process. Moreover, seek tips from Nash Advisory on how to get the best returns on your franchise. Moreover, ask the franchiser some questions to ascertain whether they are right for the task. Inquire about;
- The transfer fees after selling the franchise
- The buyer’s qualifications
- The rules used to value the business
- Market your franchise
You can use different strategies to locate potential buyers. Most brokers use online portals and websites to market businesses. To locate the best deals, you need an aggressive franchisor, but a business broker can also help out. But don’t go for franchisor brokers. They are useful in marketing new franchises and not operational ones. However, marketing a franchise is quite complex because this varies from one franchise to another.
- Consider the factors influencing the franchise value.
Multiple aspects influence the real value of a franchise. First of all, the timing of the sale matters and determines whether you find a suitable buyer for your business. If there are many buyers interested, you’ll likely fetch a higher resale value.
The financial position of your franchise is also paramount. It helps in the valuation of the business and profit projection. Lastly, your business’s growth potential also determines the value of your franchise.
- Plan your exit
Selling a franchise may take a long time to complete the process. Start looking for buyers years beforehand and start preparing for the exit too. By early preparation, you identify the weaknesses in your business. And this allows for operational improvements to raise your property’s value.
One of the common issues that come up during franchise sales is the lack of a formal employee, supplier, or customer contact. And you should address this before putting up the franchise for sale.
- Negotiation& Closing the deal
Once you locate an interested buyer, negotiate the prices and close the deal. Selling a franchise is different from other types of businesses, and the variations are;
- The buyer must be awarded a copy of the FDD 2 weeks before being awarded the franchise
- Since you’re disposing of an existing business, buyers may concentrate on the specific business than the franchise model and its advantages
- Some franchisors may require clients to be part of the Discovery Day before making an offer, but this depends on the franchisor.
After a sale agreement, the franchiser closes the deal, but this also varies from one franchiser to another. May prefer to review the sale agreement and not get involved in other closing processes. All in all, all sale closing is usually virtual.
A quick wrap up
Selling an operational franchise is easier than marketing an independent business. Most companies lack the right infrastructure and systems to attract buyers, but this isn’t the case with franchises. If you’re planning to sell your franchise, consider the ideas mentioned above and enjoy an easier and faster sale.