Exit Plan

Do Your Franchisees Have an Exit Plan?

Franchise Resales is 12 years old and most of our team members have been a part of the franchise industry for many more years. With a growing team of account managers, support staff and marketing, we can definitely be a valuable addition to your resale process.

We have worked with Franchisors and their Franchisees for 12 years to help prepare them for their exit from the business. Developing an Exit Strategy, to put it bluntly. Not only will an exit strategy help your franchisee to be prepared, but it will promote growth and help you – the Franchisor – to increase your own profit. We have sold a wide range of franchises for many different reasons, but one thing we know for certain is that having an Exit Plan puts franchisees in a much better position when the time comes to sell. Even if it ends up being an earlier exit than you or your franchisees would have liked.

We are resale specialists, we pride ourselves on our resale process which has been developed over the last 12 years and is absolutely proven to work. Selling a franchise is not an easy process, with so many parties involved it can get a little tense at times. During a sale, we liaise with all parties involved to ensure the sale goes as smoothly as possible. We see the sale through to the very end.

Our Vision is to help as many franchisees as we possibly can to get a return on their investment. When it comes to selling a business, getting the best price for it will depend upon how much planning was involved at the start. That’s why we are calling on Franchisors to ensure that their franchisees are as prepared as they possibly can be, and they will ultimately make more profit in the process.

Resales are a great thing for a franchise. Especially profitable ones. They show people that the brand is successful and growing, and with new franchisees come new ideas and a new zest for business.

Eventually, the time will come for all franchisees to sell, pass on or close their business. The more prepared the better! So we are offering Free Exit Planning Seminars. Whether your franchisees are just starting out or have been established a while, these seminars will help to confirm the message you are sending to them. “planning for the future is essential”

How does Exit Planning help your franchisees and you?

It’s an exciting time when your franchisees are getting their new business off the ground. Their time and effort is spent making all of the urgent decisions. Oftentimes an Exit Strategy is the furthest thing from their minds. But it’s at the point that they are buying their franchise that they should be thinking about their Exit Plan and it should be firmly embedded into their business plan.

When your franchisees know exactly what they want to achieve right from the very start of their franchise journey, they increase the likelihood of walking away with a return on their investment. As well as showing your other franchisees and prospective franchisees just how lucrative a franchise in your network can be.

Regardless of your franchisees reasons for selling their franchise, be it retirement, handing the business down to the next generation or selling to make a profit, a plan is needed. The more robust the plan, the better the chances of succeeding.

Of course, even the best-laid plans don’t always go smoothly. In the event of a franchisee needing to sell urgently, a franchisee who has thought about this at an early stage will no doubt have an easier time trying to sell their business than one who has no plan.

We know there may be changes along the way, but we also know that a franchisee with an Exit Strategy is likely to achieve a better price for their business than one who is not prepared.

Why not give us a call today and book your Free Exit Strategy Seminar you know it makes sense.

What to expect when selling your franchise

What to expect when selling your franchise

Starting a franchised business and generating a profit is fantastic, however, what do you do with the business when you want to retire, or fancy a career change or even if something unexpected forces you to need to take time off? The earlier you start making arrangements for exiting your business the better. Call it a goal, what do you want to achieve from your business? For most people, they would want a return on investment. The only way to achieve that is to plan for it.

In most cases, the terms of exiting the franchise will be written in your franchise agreement. However, it is important to understand that the franchisor will have the ultimate say on who will buy your franchise. The person buying the business will need to be right for the franchisor and have the skills necessary to carry on running a successful business within the particular franchise. The earlier on in the process your franchisor is notified the better, you don’t want to find yourself a buyer only to have them turned down by the franchisor at the last minute.

When you do decide to sell your franchise, prospective buyers will want to see a ‘neat and tidy’ business. In order to sell your business for the best price, you will need to be open and honest about your business. A Prospectus of Sale will need to be written which should include; a description of your franchise, the price you wish to achieve, your turnover and adjusted profit history, copies of accounts and up to date management accounts, will be required along with full details of any equipment owned/leased and information regarding key contractual information (e.g employee, suppliers, landlords).

When it comes to valuing your business you have to be objective. The value of a business is viewed differently by the person currently running it to that of the prospective buyers. Buyers want to see that the business can generate and maintain earnings/profit. If you decide to sell your business then you must be able to show this, so putting it on the market and then not continuing to work on the business could mean you will lose out. The formula to determine the price your business will be sold at will be determined by the sector you operate in and the current market conditions. To get the best possible price you need to have planned for your exit and worked hard to implement your exit strategy.

Deciding whether to sell your business as an Asset Sale or a Share Sale. If you run your business as a limited company a big decision for you is to sell the assets of the company or the shares of the company? If you decide to do a share sale, you will sell the limited company and so there is no need for a formal transfer of assets. If you decide to go down the route of an asset sale you will only need to formally transfer all the assets to either the buyer or a new limited company. There are pro’s and con’s to either route but this is something that you will need to decide with your accountant before you agree on a sale.

Selling your franchise does take time. There are lots of things to consider, but it will be easier if you have made these decisions beforehand and are prepared for your sale. When selling a franchise not only must you keep running your business, you also need to find a buyer, liaise with the franchisor and buyer, then once you have franchisor approval and a price agreed there will be a need for solicitors to become involved. Balancing all of these things can be tricky and when emotions get high, things can go wrong very quickly.

By instructing a dedicated resale broker to handle your sale you can focus on running your business in order to get the best price possible. Here at Franchise Resales, we will take you through the whole process. We will value your business, create a web advert and advertise your business to find the right buyer, create a prospectus of sale, liaise with you, the franchisor, the buyer and all the solicitors right through to the sale completion.

If you would like more information on selling your business call Keith on 01522 246811 and get a FREE Market Appraisal.