A business owner decides to sell the franchise due to various reasons. Relocation, retirement, and owner burn out are some of the reasons due to which the owner decides to sell his business. Buying involves a lot of research and evaluation, but let me tell you that selling a franchise also involves many other aspects. Following an inappropriate procedure for selling a business will lead to a lot of confusion and ultimately land you on a deal that is far less than the actual worth of the business. Therefore, one must be well-informed about the intricacies of selling a business so as to find the best deal in the market. Here are a few suggestions for selling a franchise business.
Go Through the Contract
You must have signed several agreements when you bought the franchise from the franchisor. Now since you have decided to sell it off, it's time to review all the signed agreements once again. Many franchisors set certain rules for selling or transferring a franchise. Therefore, one must be well-informed about them so that there is no deviation from the set rules and the sales process is carried out without any problem.
Inform the Franchisor
The first person you need to inform about your decision to sell the franchise is the franchisor. Keeping the franchisor in the loop can also help getting in contact with prospective buyers in the area. Franchisors have a strong network and often have information about potential buyers. Taking their help can get you a good deal and reduce your effort substantially.
Secondly, as the franchisor will already be aware of the buyer's details, it will result in a win-win situation for you as well as the franchisor.
Study the Market
It is very important to study the market before listing your business for sale. Market research will help you in studying current market scenario and identifying the kind of buyers you can expect for the business. It also helps in understanding whether the market is booming or is slowing down, which will help you to decide the selling price.
A high selling price can be quoted if the market is good and vice-versa. A realistic selling price will attract potential buyers and increase the chances of settling the sales deal.
Decide the Sales Package
A sales package has to be prepared to inform the buyer about all the things he will get the charge of, like assets, employees, equipment, material, etc., that are a part of the business. The package must also include the price of the franchise that is fixed after thorough market study. It is the duty of the owner to inform employees about his decision of selling the business.
Advertise the Franchise
Advertising is extremely necessary to attract potential buyers. A franchise may be one of the best business opportunities, but if efforts are not made to inform the buyers, there are very less chances of someone approaching you to buy it. To list your business in the market, you can place advertisement on websites, local newspapers, or contact franchise consultants who can get you in touch with potential buyers.
Prepare Sales Pitch
A perfect sales pitch is the key to strike a deal. Therefore, practice your sales pitch several times before actually facing potential buyers. This will help you in preparing answers for questions that are most likely to be asked. Keeping yourself well-informed about the current market trends, profit history, and future prospects of the business will instill confidence in the buyer.
Confidentiality must be maintained till the sales deed is finalized. Keeping the information open to all may create unnecessary concern among vendors, employees, customers, and other people associated with the business. Business rivals may take undue advantage of this information which may not be good for the reputation of the franchise.
Provide Necessary Information
Any information that is the right of the buyer must be provided. Information regarding financial accomplishment of the business and other related non-financial accomplishment must be provided in the information memorandum so as to maintain transparency between both the parties. Non-disclosure of important details may lead to unnecessary conflict in the future.
Do Not Hurry
Most franchise owners make the mistake of setting a closed time frame for selling the business. This often makes them to settle for a price less than what the business is actually worthy of. Unless there is a time constraint, it is better to give sufficient time for finding the best deal because selling a business often takes several months.
Assist the Buyer
Like you looked up to the franchisor for help when you were setting up the business, it is obvious that the buyer of your franchise will also ask for help. It is your responsibility to assist him and offer necessary training and advice so that he can take over the business smoothly.
Keeping these things in mind will help you in finding a buyer for your franchise. If you present the franchise business opportunity as a lucrative one, and pitch in the best possible way, you will surely be able to strike the best deal in the market.