Once you have decided to sell your franchise business, it's essential to understand the steps involved in the process. The good news is that franchisors consider the sales of existing franchises vital to the health and success of the overall franchise system. They know that all franchisees have a life cycle and almost everyone who buys a franchise will at some point want to sell it, according to the International Franchise Association (IFA). Chances are good that your franchisor will want to keep their franchise unit in your location, so they will be supportive of the franchise re-sale. And, in most cases, a new motivated buyer can further develop the business for their own benefit as well as the franchisor, according to the IFA. The trade group notes that most mature franchise companies have around 7 to 10 percent of their network for sale at any one time, for a variety of reasons including retiring, relocating or personal reasons.
Re-selling the franchise is a very different process than buying one from the franchisor. The marketing and the actual selling of the unit or units can be very challenging. Buyers will be looking for in-depth information about the business, including:
- The reason why you are selling and if it has any impact on the future of the business
- The details of the financial performance of your business
- The status of employees in the business and whether those important to it plan to stay
- The status and value of the real estate involved in your site
- Proof of all of the information you are providing
If you have a successful franchise, you should expect to be able to sell for a multiple of earnings — depending on future trends expected to impact it. If your franchise business is not performing well and you would like to sell, it may sell for a percentage of your asset value. Whatever position your franchise is in at the time you would like to sell; industry experts encourage working with a business broker to accomplish the most value derived. It is especially helpful to find one that has significant experience in selling franchises. Transworld Business Advisors is part of United Franchise Group, with over 35 years of experience in the franchise industry, and understands the complex needs of a franchise system. We offer franchise systems unmatched confidential assistance in the sale of their existing franchise units. As a member of Transworld's Franchise Resale Program, our 350+ highly trained professionals will manage the entire franchise resale process in your local area including:
- Provide franchisors with up to date reporting on the sales progress
- Prepare a comprehensive business analysis
- Assist in valuation
- Confidentially market the franchise throughout our extensive network
- Meet with and qualify potential buyers
- Assist in the preparation of the offer
- Manage due diligence
- Coordinate the closing of the sale.
Whether it a single unit, or a multi-unit franchise sale, Transworld Business Advisors will handle the franchise resale process from beginning to end.
Call us to learn how we can help.
