No matter how long you’ve been running your franchise business, the time will come for you to sell your franchise.
This should be a rewarding moment, considering the amount of effort, time, and money you have invested.
However, deciding to sell your franchise subsequently creates the problem of how to go about it.
Not knowing the steps to take may discourage you from selling your franchise, but there are some simple things you can do to help you in the process.
Determining the Right Channel to Sell Your Franchise
There are two approaches to selling your franchise. You can use the ‘for sale by owner’ (FSBO) method or you can hire a business broker.
Selling your franchise on your own can be daunting, but when you have the right information, it will make the process less difficult.
Request a free no-commitment consultation for selling your business
However, if you do not want to undertake the task of selling your franchise on your own, you should consider hiring a business broker. Employing the assistance of a business broker can produce the desired result because you will be handing over the sale of your franchise to an organization with the needed resources and experience.
Steps to Take (FSBO Approach)
Some franchise business owners prefer to sell their franchise without involving a third party. This decision may be a result of the costs involved and how critical the role of selling a franchise can be.
If you are contemplating selling your franchise business on your own for the first time, you should follow these steps:
#1. Evaluate the Worth of Your Franchise
The first step to take in trying to sell your franchise business is to evaluate the franchise’s financial value. Knowing the value of your company will not only help you determine the selling price of your franchise, but it will also help potential buyers.
A buyer who plans to buy your franchise will likely purchase it through a bank loan. For the potential buyer to access the loan, the bank will request an appraisal of the franchise they intend to purchase.
#2. Include Your Franchise on Business Listing Websites
Often these business websites are filled with numerous franchises trying to push the sale of their business. Notwithstanding, these sites can turn out to be useful in creating leads.
#3. Personally Contact Other Franchise Owners
Make a personal a call to other franchise owners to discuss your intention of selling your franchise. Then, if you have the opportunity, invite them out to lunch to discuss your plans.
During these discussions, you will gain valuable insights and might even be able to discover if any of them are interested in buying or if they know someone who might be.
#4. Inform Your Employees
Unless you have decided to keep the sale of your franchise confidential, you should inform your employees.
It’s possible that one of your employees may be nursing the ambition to own a business just like the one they work in. They may also have the means to purchase and operate the franchise.
Apart from this possibility, your employees can also be a source of referrals for the sale of your franchise.
#5. Speak with Your Franchisor
Your franchisor is in the best position to help you find buyers for your franchise. This is because most franchisors have information concerning the people making inquiries about franchise ownership in your location.
Most franchisors have a customer relationship management (CRM) tool to keep a record of this information (although they might not be willing to share this information with you – but it doesn’t hurt to ask).
#6. Tell Others of Your Intentions via Word of Mouth
This is an important method of drawing in buyers for your franchise. Offer a bonus that gives the referrer a certain percentage upon the successful transfer of your franchise.
Doing this will motivate people to spread information concerning the sale of your franchise.
#7. Offer a Bonus for a Successful Referral
Holding seminars to gather and teach potential buyers about your franchise business can go a long way in increasing your odds of a successful sale.
Doing this allows them to see the opportunities in your business. As a result, they may want to have a business of their own just like yours, which creates the chance for you to sell your franchise to them.
#8. Teach Others about Your Franchise Business
When you encounter potential buyers, don’t delay in presenting the information that will both catch their interest and be most useful to them.
#9. Provide Useful Information
If you have multiple franchises, the idea of selling them all at once may seem attractive. However, it may also prove to be difficult. The best way to sell multiple franchises quickly is to sell them separately.
Selling the units together makes the price intimidating and can discourage many buyers from coming around.
#10. Sell Your Franchises Individually
The first step to take in trying to sell your franchise business is to evaluate the franchise’s financial value. Knowing the value of your company will not only help you determine the selling price of your franchise, but it will also help potential buyers.
A buyer who plans to buy your franchise will likely purchase it through a bank loan. For the potential buyer to access the loan, the bank will request an appraisal of the franchise they intend to purchase.
#11. Assign Roles to Others
Having to divide your attention between running your franchise business and trying to sell your franchise can be stressful. To deal with this problem, consider assigning roles to people around you.
For example, you may need someone to help you make calls, post ads, gather and organize information, etc.
Assigning these duties to different people can help reduce the workload. If you do not have someone to help you, you may have to employ a business broker to take on the task of selling your franchise.
#12. Be Patient and Active
You may not get a buyer as quickly as you’d like. Many times, it may take up to 6-12 months to secure one. Irrespective of how long it takes, patience is key – but that doesn’t mean you should relent in trying to drive sales. Keep at it consistently.
Advantages of Using a Business Broker
Deciding to go through this process with a business broker can be of great benefit when selling your franchise. Here are some of the advantages of using a business broker:
#1. It’s faster
Because business brokers have the resources and the connections required, they can easily get leads for the sale of your franchise.
Also, hiring a business broker takes away the stress of talking to leads who ultimately have no intention of buying your franchise.
When you employ a business broker, they will do a good job of sifting through the leads to derive the serious buyers. All this will help in hastening the selling process.
#2. It helps you get the best deal
Since most business brokers have been in the business of selling franchises for years, they can help secure the best deal for your franchise. In addition, a business broker can easily assess the monetary value of your franchise.
This helps them to properly negotiate with buyers and subsequently secure a profitable deal.
#3. It helps you realize more profit
The connections and resources that business brokers have acquired enable them to locate buyers who are clamoring for your franchise. This is a result of the sheer number of buyers a business broker can attract.
Keep in mind that an increased number of buyers will often subsequently increase the selling price.
#4. It helps keep the process confidential
To sell your business yourself, you need to reach out to different people, as explained before. However, reaching out to competitors, franchisors, landlords, employees, etc., can all expose your business to some risks that might adversely affect your business. For example, if employees know you are thinking about selling your business, they might consider the first offer that comes their way as they might not feel secure in the business anymore. An experienced business broker helps keep the process confidential until the end of the process, which could help keep your business protected.
Contact a Business Broker
If you are selling your franchise for the first time, you may want to consider contacting a business broker. A business broker can save you the stress and worry that comes with trying to sell your franchise.
At Zoom Business Brokers, we are fully equipped with the experience and resources needed to assist you in selling your franchise.
By reaching out to us, you automatically shift the burden of selling your franchise onto our shoulders – and we can assure you that we have everything it takes to produce the desired results.
