Time to Leave the Nest?January 10, 2013
In discussions with Franchisor about Franchisees selling their business we often hear the following:
- ‘Who have you sold your franchise to?’
- ‘What information did you get before you bought?’
- ‘What do you mean they have already taken over?’
- ‘We should have met before now’
- ‘Who gave you these projections?’
- ‘What do you mean you have assigned your lease already?’
- ‘When will we get our Transfer Fee?’
And many more frustrating ‘after event’ issues
The key from the Franchisors’ prospective is all about control and process. The franchisor is ultimately responsible for protecting the brand. They are looking to manage the process of
- who does what and when
- what information is given out and when
- who talks to whom and when
Here are some of the things that you should consider when selling your franchise.
- What is the Franchisor’s Sale Process
- Notice and responses as per the Franchise Agreement
- Confidential documentation
- Information release & exchange
- Formal right of 1st refusal by Franchisor
- Advertising approval – what is the process?
- Business as usual – keep operations at an excellent level
- What training is required by the prospective and who pays for it?
- What equipment, upgrades and refurbishments are required by you before you are able to gain approval to seel your franchise
- Why use a Sale Information document?
- What is the handover process including stocktaking of goods?
- What are my restraint of trade clauses?
- Procedure by exiting franchisee
- Property related issues
and many more…..
In summary, selling your franchise is a major decision and one which should not be taken lightly. When selling, remember to disclose all relevant information to the prospective purchaser and ensure all of your accounts are up to date. Whilst your business is on the market be mindful not to neglect its daily operation so that you can attract the best possible price.
In the end, though, the value of your business is only as much as someone is willing to pay for it, so choose the timing of your sale carefully to get the best possible price
For further information on ‘How do you go about selling your Franchise’ please Mark Fernandez at firstname.lastname@example.org
Business Development Alliance
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