Selling a franchise is an exciting prospect. It’s also a big decision. If you’re thinking about selling your business franchise, there are a few things you should consider before making the leap.
There are many benefits to selling a business franchise. However, there are also risks involved. Selling a business franchise is a major investment. So, you want to make sure you get the best deal possible.
If you’re considering selling your business franchise, here are 5 things you should know before you sell.
1) What Is The Best Deal?
The first thing you need to do when deciding whether or not to sell your business franchise is figuring out what kind of offer will give you the most money for it. There are three ways to go about this:
You can either find someone who wants to buy your business and negotiate with them. Or, if that doesn’t work out, you can try to sell in online marketplaces. The best move and the third way to do this is to seek professional brokers to do the job for you!
2) How Much Will I Get For My Business?
Once you’ve figured out how much you think you’ll be able to get for your business, you have to decide where you want to list it. Listing in multiple places gives you more exposure than just posting on one site. But, it takes time and effort to manage all these listings. And, some sites charge fees for each ad they post.
3) Do I Have A Good Offer In Hand?
When listing your business for sale, you may receive several offers from potential buyers. Some people don’t even bother reading through those offers because they assume their offer is better than everyone else’s. This isn’t always true. When evaluating bids, look at everything carefully. Don’t let yourself be swayed by emotion. Make sure you understand exactly why other companies bid so high. Then, compare apples to apples. Look at the numbers. Compare the price per square foot to similar businesses nearby. Ask questions like “How long has the company been around?” and “Do they pay dividends?”. These are important factors to take into consideration when comparing bids.
4) Can I Afford To Sell Now?
When looking at the financials of your business, keep in mind that you won’t see any profits until after the transition period ends. That means you might not realize as much cash flow right away as you would expect. Also, remember that you still owe back taxes. Depending on the state you live in, you could face penalties for late payments.
5) Who Are Potential Buyers?
Before you start shopping for a buyer, you need to figure out which type of person you’d prefer to sell to. Would you rather sell to another entrepreneur? Someone who already owns his own business? An investor? A bank? Another franchisor? All of these options have pros and cons. Deciding which option works best for you depends on your situation.
6) What Is The Best Time Of Year To Market My Business?
The best time to market your business for sale is during slow seasons or off-seasons. During busy times, customers will likely be focused elsewhere. By waiting until slower periods, you give yourself plenty of time to prepare for the sale.
7) Where Does My Business Sit On The Value Chain?
Your location plays a huge role in determining what kind of value you can command for your business. For example, if you run a restaurant with locations throughout California, you probably aren’t going to fetch top dollar compared to someone running a chain across the country. Location matters!
8) Should I Hire Professional Help?
One of the biggest mistakes new sellers make is trying to handle the entire process themselves. They end up spending too much time doing paperwork instead of focusing on growing their business. Instead of handling every aspect of the transaction yourself, hire professionals to help you. Professionals can save you tons of time while helping you avoid costly errors. Plus, hiring experts makes the whole experience less stressful.
We are a full-service business brokerage firm that specializes in helping franchisees sell their existing franchises. Our team has over 100 years of combined experience in franchising and we have helped hundreds of franchisees sell their franchises. We have access to thousands of potential buyers and our network of contacts allows us to quickly identify the right buyer for your franchise. Call us today to book an appointment!