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Five Factors to Consider Before Selling a Franchise

Selling a franchise is more complex than selling an independent business. It may sound strange, but the preparations for selling a franchise should start the moment you purchase it. When the time comes to sell your franchise, you can sell it yourself, outsource your sale or hire a broker to do it for you. Regardless of the approach, there are some factors that you should consider before selling a franchise. 

1. Determine the Value of Your Business

One of the most important things you should consider before selling a franchise is its business value. A business valuation professional can help you determine a fair market value of your business by studying the market, valuing all of your assets, reviewing your financial records, and considering other facets of your business. The best thing about using a professional in determining the value of your business is that it minimizes the chances of the prospective buyer negotiating the price.

2. Prepare Your Business for Sale

Set your business apart from other franchise sellers by making your business appealing from all aspects, including visually, financially, and operationally. Clean up retail spaces, refresh with paint, and repair anything that is broken. Keep your business as profitable as possible by managing costs and boosting sales. Examine your systems, operations and procedures, customer service, inventory management, and employee engagement and make improvements to enhance the performance of your business.  

3. Establish the Reason for Selling 

Be prepared to answer questions pertaining to the reason you are selling your business. Possible answers could be that you are retiring, you have another business opportunity, the business was a mismatch for you, you are a business flipper, etc.   

4. Communicate with the Suppliers, Franchisor, and Lessor

Before putting your franchise up for sale, you should notify the franchisor, suppliers, and the lessor (if you’re leasing). They will have terms and conditions that you will need to follow in order to sell your business. It’s important to respect all parties involved and assure them that any requirements they have will be fulfilled even after the sale is complete.  

5. Choose the Correct Time

When it comes to selling a franchise, timing is everything. The best time to make the sale is when you have plenty of options to choose from. If you want to get a good price for your franchise, do not wait until there is a downtown in your business. It’s best to move forward with selling when your business is in great shape. Generally, it takes 12 or more weeks to complete a franchise sale. It takes even longer to prepare to sell a franchise. Therefore, you need to consider this time frame when determining the timing of your sale and your marketing budget.   

Are you looking to sell a franchise? Reach out to us at Franchise Resales and let us guide you throughout the process. 

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