Reselling a Franchise? Follow These Steps
Franchise opportunities give you a chance to dip your feet into the business world using someone else’s name and business plan. Franchises give you a framework to do business, and resources you wouldn’t have if you struck out on your own. We love franchises, but we also know that a lot of entrepreneurs eventually want to leave the known entity for a chance to strike out on their own. If you’re looking to sell your franchise, here are the steps you need to follow.
Look at Your Franchise Agreement
The first step in preparing to sell your franchise is to look at your franchise agreement. A lot of franchise agreements list the dos and don’ts for selling a franchise. You may find out that franchisers will help you sell your franchise, or offer you resources. You also need to check the document to see if you’ll have transfer fees or if you have to undergo special training in order to sell the franchise. Check for obstacles with regard to the sale of your franchise.
Contact the Franchise Company
You’re going to need to communicate your intentions to the franchisor. While you’re having a conversation with them, be sure to ask questions. You need to know if the company has specific requirements regarding who purchases the franchise, and whether the company offers assistance in selling the business. Be sure and ask how the company values the franchise because you’ll need to estimate how much your business is worth.
Prepare Your Business for the Sale
This is the time to get all of your books in order and make sure they reflect your success. If the building needs a new coat of paint, or there are minor maintenance fixes that you can do to make your business look better, you should do it. You want your business to be valued as high as possible, so you’ll get the best price for all of your hard work.
As you’re getting offers, be sure and keep your franchisor in the loop. They may want to partner with you when you are interviewing prospective buyers. Most franchisors have to approve the new owner before they sign off on the deal. Be sure that you have fulfilled all the requirements of your franchise agreement before you sell.