Sell Your Franchise

Selling Your Franchise

You may be considering selling your franchise business and are stuck as to how to go about it. This is because selling a franchise can be quite complex; remember that you are not the business name’s original owner. Essentially, you are doing business under the name of another business. Do not worry as we have got you covered.

Here, we have provided a comprehensive overview of what is involved in your franchise’s sale – the process before a sale, when to sell, how to sell and much more. Read on for this high-level overview.

When and Why Should You Sell Your Franchise Business?

These are the most important questions by far, and they mean the same thing almost all the time. So many factors may be responsible, but not all are right. Amongst others, we list several recommended factors that should cause a sale to happen.

The Business Has Achieved Some Success

You have run the franchise business for some years, and during that period, you have been able to surmount all the challenges that arose. You have seen the business through the difficult periods. You have paid up most debt, or at worst, you have achieved a good credit status. Then, the business has increased revenue far above the expenses, and thus returns a healthy profit. More importantly, the franchise is in a healthy cash flow position. 

If all, some or even more of these factors are present in your franchise business, it may be time for you to sell. The company’s good books will attract quality valuations that will make the payoff quite huge and highly rewarding for you.

The Business Is Undergoing Tough and Intractable Problems

On the other hand, negative events might be why you consider selling your franchise business. Among other things, if the company is facing huge losses, its cash-flow is not enough to cater to its operations. If the company is taking on a lot of debt or has a poor credit position, then you may consider selling the company, if all other strategies fail to work.

The reason to do this is to save the business from further decline that may lead to eventual business collapse and liquidation. If the business is sold at the right time, it might still command some healthy valuation, and therefore a rewarding payoff.

As a Way to Exit the Business

As an entrepreneur, one of the most rewarding ways to truly enjoy the rewards of all the work you have done over the years is through an exit. Exits usually happen when someone else acquires your stake in the business; many times, this will happen via selling the stake. In actual independent businesses, this may happen through an initial public offering (IPO).

Whether the company is very healthy or performing not so well, exiting is a way for you to retire from business. You can then exploit your hobbies in your free time or go on to another venture.