So you’re thinking about selling your franchise. The good news is, all the positive reasons you got into the franchise game are still true! Franchises are always a desirable sale, due to the broader organisational support, and the structures already in place. It’s not a done deal just yet – but with our top tips you should find a smooth journey ahead of you.
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 yourself? Say it with us – ‘Research is Key’. Study your market, see how quickly other franchises are being sold. Review your current business plan, consider if now the best time to sell or if there will be other inflection points ahead. How about your personal calendar, do you have time to commit to this process?
Step 2: Do you know how much your franchise is worth?
Outside help is necessary here. Arrange a meeting with a certified business transfer agent, who will understand the market conditions and how these influences will affect your sale. Daltons offer a free, no strings attached valuation, we will put you in touch with a BTA that will meet you at a convenient location and time to provide a comprehensive valuation. Click here to speak with them about arranging a valuation.
A range of factors will be considered when the franchise is valued including recent adjusted earnings, location, assets and the type of industry. Get all the information together and leave no stone unturned!
Step 3: Do you know how to market your franchise sale?
You’re going to need 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 not, a business broker can do this for you too. Marketing the sale of your business varies from franchise to franchise, they can be a bit more intricate than selling an independent business.
Need somewhere to list the sale? 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 and franchise for sale marketplace with over 20,000 businesses for sale in the UK and abroad. And if you want help writing your listing – we’ve got a guide just for that. Engage a broker and they will get your advert across all of the major sites, for maximum reach.
Step 4 – are you ready to close the deal?
You’ve found a buyer, who’s interested in the franchise model and your business specifically? Time to negotiate a price and close the deal. This can involve a few meetings, but thankfully you’ve followed step one and set time aside for viewings and 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! This will make your side appear more vulnerable and give the buyer the upper hand in negotiations.
Bonus Step: Be Honest
Throughout the whole process, honesty is essential. Your research, valuation and marketing needs to be rooted in the reality of your business, or this sale could fall apart.
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.
Once it’s time to confirm the sale, ensure that the ‘Heads of Terms’ document is signed by both parties. This takes 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. And there you have it – one tidy franchise sale!
By following these steps and commissioning a qualified business transfer agent, you can effectively sell your franchise.
