How To Sell A Franchise Business

As a business broker and franchise sales consultant I am often asked what the general process is to sell a franchise business. It’s a valid and important question because at some point the vast majority of franchise owners will want to sell their business for a variety reasons including retirement, relocation, divorce, owner burn out, etc. Here are some general tips below that all franchisees should keep in mind before putting their franchise business up for sale and will hopefully make the sales process unfold much smoother.

Contact the Franchisor

It’s important to let your franchisor know that you are considering selling for a number of reasons. Most franchisor’s have explicit rules (read your franchise agreement carefully) regarding the transfer of franchise unit to new ownership including buyer qualifications, disclosures, transfer fees, etc. Most franchisor’s can also be very helpful in the consummation of the re sale and may even have a prospective buyer on file who has expressed an interest in your specific location or territory.

Sale Preparation

Before moving forward with a listing it is imperative that franchise owners invest the time to prepare and provide sufficient information for a comprehensive listing package that should include a business summary profile, equipment & asset list, and most importantly current and past financial statements. Most prospective buyers will not move forward with a business purchase unless they and their advisors have been provided adequate financial information to verify the business is a good investment. I would strongly recommend that you consult with your accountant or book keeper to help prepare your business records to help validate and support your asking price.