I'm interested in selling my franchise. How do I sell a franchise? -- that's an inquiry we recently got from a visitor to our Resources for Entrepreneurs site. Here's our advice on how to sell a franchise business.
Sooner or later, every franchise owner will have to go through the process of selling the franchise.
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But many sales owners go into the selling process completely uninformed about what to expect, resulting in endless amounts of frustration and sometimes even a lower selling price than the franchise is worth.
You've worked hard to build your franchise and you deserve to get every penny that's coming to you. With that in mind, here are a few suggestions to help you get started.
Keep Your Franchisor Informed
It's important to keep your franchisor informed about your plans to sell the franchise at the very beginning of the sales process. Many franchisors have rules regulating franchise sales. These rules should have been listed in the franchise contract you signed when you bought the franchise. Go back over those rules with the franchisor to make sure everyone is on the same page.
Your franchisor might also be able to offer assistance in selling your franchise. Sometimes franchisors are aware of potential buyers who are interested in a specific territory and are looking for a relatively "turnkey" operation.
Prepare for the SaleInforming your franchisor about your intentions is only the first step. You also need to prepare to sell your franchise before you actually place it on the market. Included among the preparations you will need to do are establishing the value of the franchise, setting a price, compiling financial information, notifying key employees (if necessary), and putting together a sales packet.
Be aware that some franchise sales require more upfront preparation than others. Again, talk to your franchisor for specific advice about what you may need to do for the sale of your franchise.
Know the Market
It is absolutely imperative to have a basic understanding of the market before you list your franchise. How much have similar operations sold for recently? Is the market hot or cold right now? What type of person is most likely to buy a franchise like yours?
The answers to these questions (and many more) will have a direct bearing on the sale of your franchise. You may discover now is not the best time to sell your franchise. On the other hand, you may discover that your franchise may be worth more than you thought.
Advertise & Practice Your Pitch
Your franchise may be the best deal in town, but you're going nowhere unless buyers know about it. Make certain to abundantly promote your franchise through every possible avenue. If you need help with this, you might even want to consider listing it with an agent. Also take some time to practice your sales pitch. Recruit a few friends to critique your pitch before you "go live" with actual buyers.
Provide Assistance To the Buyer
Ultimately, you might need to provide assistance to the buyer of your franchise. Assistance comes in a lot of forms, but it might include training or even working alongside the buyer for the first few months.
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