Franchises are often a desirable sale due to the level of support from the organisation and the structure already in place. Each franchise is different and depending on the service/product offered, staff & management structure and how the branch is performing, each resale will vary. However, there are a few steps each franchise owner can take in preparation for a resale.
Step 1: Is your franchise ready to be sold?
As a branch owner, you need to begin your sale process by contacting your franchisor. No-one knows the franchise better than them, so ask for advice and find out the extent of assistance they offer. If you are the franchise owner, research is key, study your market and see how quickly other franchises – in your industry – are being sold.
Have your business valued
Arrange a meeting with a certified business transfer agent, who will understand the market conditions and how these influences will affect your sale. Intelligent Business Transfer offer a free, no strings attached valuation, meeting you at a convenient location and time to provide a comprehensive valuation. Click here to speak with them about arranging a valuation. https://www.intelligent.co.uk/selling-a-business/valuation
A range of factors will be considered when the franchise is valued including recent adjusted earnings, location, assets and the type of industry.
Step 2: Market Your Franchise
Preparation also includes attaining a valuation, collating your financial statements, and developing a marketing document — often called a brochure or advert.
A personalised advert is essential in attracting the right type of buyer. Often you can receive help from your franchisor, but if they cannot avidly market the sale of your business, a business broker can do this for you. Thorough and complete research of the UK buying market should also be undertaken.
Marketing the sale of your business varies from franchise to franchise, they can be a bit more intricate than selling an independent business.
In the UK there are a range of business sales sites you can list your franchise on. Daltons is one of the UK’s largest business for sale marketplace with over 27000 businesses for sale in the UK and abroad. If you were to sell using a broker, your advert will be displayed across all of the major sites – giving you an all encompassing reach.
Step 3 – Closing the Deal
Once you’ve found a buyer who is interested in both your business and the franchise model, you can negotiate a price and begin with the closing process. It is important to make sure you set time aside for meetings, viewings or negotiations.
Clear and constant communication with the prospective buyer during negotiations is key to achieving a favourable price and terms. However, you should avoid rushing interested buyers into making an offer, as this will make your side appear more vulnerable and give the buyer the upper hand in negotiations.
Any questions forwarded by the prospective buyer should be answered swiftly and sincerely. Any delay or disingenuity will aggravate buyers and instantly place doubts regarding reliability. Supporting the buyer will lead to a quicker sale.
To solidify the sale, ensure that the ‘Heads of Terms’ document is signed by both parties to take your franchise off the market, thus entering the due diligence phase of your sale. Work alongside your solicitor to set systemised timelines and forward these into your Terms document.
By following these steps and commissioning a qualified business transfer agent, you can effectively sell your franchise.