How To Sell Your Franchise Business Successfully

Franchises are among the most prolific businesses in Australia. They have grown in popularity, market size and numbers over the years. Many aspiring entrepreneurs prefer franchise ownership over starting up because they get to own an established venture with plant and equipment. In addition, it comes with advantages like high brand recognition and growth opportunities. With an outpour of demand for these entities in the market, selling them is quite easy.

Whether it is a new franchise or an existing one, both can find qualified buyers if they are sold effectively by the owner. While a Greenfield opportunity seems attractive, franchise resale is equally beneficial for the buyer. An existing franchise has everything in place to start trading from day one, which reduces legwork and hassles. So, here is how to sell your franchise business successfully to pursue a different path or retire for good. These tips will help you generate the best return on investment from the sale.

1. Notify the Franchisor

The first thing the franchisee needs to do before planning to sell business online is to contact the franchisor. They must communicate their intention and seek the franchisor’s approval. The franchisee can also ask for support in selling and recruitment to find the right buyer. The franchisor may or may not extend support for the resale. Either way, you must step up your game and prepare for the process.

2. Know the Market Value of the Franchise

To advertise the resale online, the franchisee must get the business valuation done by an expert. They will assess the financial health of the unit and its growth prospects. In addition, they will consider the trending market prices for similar franchises in the location and calculate the value of the assets.

After the required deliberation, they will provide a figure. The franchisee must use this to set the price with room for negotiation with the buyer. They must have the threshold price in mind to avoid wasting time going back and forth over the price.

3. Make the Franchise Ready for Sale

Before you sell business online, you must have a profitable business on hand that can attract buyers. So, conduct a SWOT analysis of the franchise and identify its strong points. Use them to grow the business and build a loyal customer base. Also, determine the weaknesses and eliminate them as soon as possible.

The step is to get the financial documents organised to be reviewed by the potential buyers during the due diligence. The seller must also prepare a franchise disclosure document that will include all the details about the business, its goals and financial information.

4. Adhere to the Franchise Agreement

The franchisee must follow the resale conditions mentioned in the franchise agreement to comply with the legal contract. They must assess the contract and identify the remaining the franchise term and the transfer fee that will have to be paid. The franchise agreement will have the conditions for resale and a list of the required qualifications of a potential franchisee. Thus, it is vital to read the agreement carefully to comply with it.

5. Advertise the Franchise for Sale

It is significantly easy to sell business online as it allows the sellers to reach a wide number of potential buyers. The business listing must provide a sneak peek into the franchise, its location, visibility and turnover. It must mention the asking price and other strengths that can attract buyers. It is vital to honestly state the reason for sale, such as retirement, starting a new business, etc.

6. Screen the Buyers and Respond to Enquiries

It is possible to get bombarded with enquiries when you sell business plan because of the vast reach of the platform. However, you need to identify the quality candidates and contact them. Provide them with the franchise disclosure document and ask for their financial information and background. Spend time assessing their credit history, education, experience, and skills to check if they fit the franchisor’s criteria.

7. Get Franchisor Approval and Negotiate the Price

After you find the right candidates, it is vital to get them approved by the franchisor. The shortlisted people must be invited for a face-to-face interaction and discussion. Answer all their questions related to training, operations and support.

Once you finalise the buyer, negotiate the price and close the deal. Handover the charge of the franchise to the new owner and give them all the documents. Get the franchise and lease agreement transferred and help them with the transition through training.

8. Be Prepared for the Worst Case Scenario

When you sell business online, you must be ready to face problems created by the franchisor. They may withhold their consent to transfer the franchise agreement because they may not find the potential franchisee to be capable of running the business. So, make sure that no such problem arises. Also, pay off your dues, such as rent or royalties, to prevent disputes during the resale.

Wrapping Up

Selling a franchise is easy because of the high demand for this type of entity. The seller must ensure that they sell the business online to reach a maximum number of potential buyers and get the required consent from the franchisor before the sale.