Why Timing Is Key for Maximizing Profits When Selling a Franchise

Selling a franchise takes some planning. Prices are tied directly to current market conditions. When you are getting that itch to move on and you’re beginning to wonder, “Is it time to sell my franchise” and “how to sell a franchise”, then you need to start making a list of things you need to do to prepare for the franchise selling process, knowing it could take some time. According to CEOConsulting.com, brand health is also a very important factor to be considered as you try and time your exit strategy for best results.

Financial Statements for Selling a Franchise

get a good deal and maximize your-profits when selling a franchise

One of the main ways interested buyers evaluate a franchise is by examining financial statements. According to the Huffington Post’s article, Graceful Exit: Selling Your Franchise or Business, your financial statements must be able to withstand scrutiny. You can bet that discussion about any trends that decline will be the subject of an important discussion. Knowing this, sellers should make an effort to schedule the sale of their franchise after a profitable year and when the tax returns are in order and completed.

Key Employees

If you can put yourself in the buyer’s shoes, it is much easier to anticipate what their concerns will be. One of the factors sure to influence a buyer’s perceived attractiveness of a business pertains to the staff. Questions about who the key players are and which employees are germane to the success of the business as compared to who is easily replaceable will be at the forefront of the buyer’s mind. Smart business people recognize how important having trained and committed employees in place is to business success.

With this fact in mind, it makes sense to stabilize and train new employees before putting your business on the market. Prospective buyers might get spooked if they find out managers are new or that there has been a lot of turnover. It is to a seller’s advantage to address any turnover issues prior to seriously considering a sale of your franchise.

The good news about selling a franchise as compared to an independent business is that franchises always have documented Standard Operating Procedures (SOP) that new buyers can use as a guide. It is also common to have comparable sales of other franchise units sold that can be used for comparison purposes. In preparation for putting your business on the market, compare your sales price to other comparable franchises for your company. Be prepared to adjust your price or explain why your price is higher than other recent units that have recently sold. Anticipating logical questions about pricing and valuation can help prepare you to answer these important questions that most buyers or their accountants and attorney will have.

Get Prepared for Selling your Franchise

As soon as you start asking yourself, “Is it time to sell my franchise,” then it is time to get prepared. Some franchise selling tips include getting your financial statements in order. Repair any obvious problems or inadequacies related to franchise property or operational inefficiencies. Prepare for the ups and downs of the process.