Top 3 Factors to Consider Before Selling Your Established Franchise Business

 Owning a franchise business is an excellent way to create consistent revenue streams while providing vital services to your community, while being backed by the support system of a franchisor. As franchise owners age or their financial goals change, many consider what to do with their established franchise should they want to retire or move on to a different venture. Of course, one of the best options to consider is selling the franchise. Many entrepreneurs are looking for a turnkey business to purchase, making selling an existing franchise to a third party a very appealing exit strategy. Selling a franchise business is a decision that should never be made lightly, so it is important to consider these factors before selling:

Price: If you are considering selling an existing franchise, it is important to analyze how much you will need to sell the business for in order to settle debts, pay taxes, and still make a satisfactory profit. Hiring an experienced tax accountant and/or business broker can help you analyze these factors and determine the most appropriate price to list your franchise for. You have worked hard to build your business and you want to ensure that your efforts will be fruitful when it is time to sell.

Employees: When it comes to selling any business, including franchises, it is important to consider your employees and the impact an ownership transition might have on them. It is also essential to consider how important their role is to the successful operation of the business and take measures to ensure their commitment to the company. Well-trained and seasoned employees are usually considered a significant asset, so any buyer will want to make sure they are happy, capable, and will stick around after they buy the business. With a happy and experienced crew, your established franchise will be more attractive to potential buyers and may help you demand a premium.

Agreements: It is important to understand your franchise agreement, lease agreement, and any vendor or supplier agreements you may have. Are they transferrable? And do they have stipulations that may restrict your options or incur and expense that you need to be aware of?

It is also important to think about how long you are willing to stick around after you sell the business. In some cases, many franchise owners can ease the transition for buyers by staying on as a consultant for a period of time. In these cases, you will need to draw up an agreement which outlines your role as the consultant and whether or not you will be paid during this time. Oftentimes, the franchise seller is not paid for their work during a shorter transition period that may last 30 days or so. However, an ongoing agreement that exceeds more than 30 days may require the buyer to compensate you.

If you own a franchise and think you are ready to move on to the next chapter of your life, we can help you with selling an existing franchise business. Do you want to talk to a Franchise Resale Consultant? Franchise Flippers can help you chose the best path for selling your franchise. Are you ready to list your franchise for sale now? Get started by promoting your franchise for sale on our exclusive franchise resale marketplace. Or, are you interested in purchasing a franchise business? Contact us at Franchise Flippers today to learn more about our online franchise resale marketplace and business selling opportunities.

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