Selling a Franchise

New franchise owners enter the market with the hope of trading profitably, and then eventually selling their franchise for good capital gain. Out of the franchise owners who do eventually sell, some fail to maximize their profit for various reasons. Some sell too quickly, some sell at the wrong time of year or wrong time during the economic cycle, other reasons include the seller not promoting the sale correctly.

If you wish to maximize your selling price, you will need to do your research and to plan well before selling.

Ask yourself: Why am I selling?

It is important to sell for the right reasons – that is, don’t let objections or disagreements to policy changes made by a franchisor affect you in relation to selling your business.

Are you selling the right way?

If you want to sell, you should do it the right way. You need to appreciate that franchising in Australia is a condensed market. Franchising in Australia continues to grow and there are various franchise outlets in different industries throughout the country. Realistically, do not expect that your sale will be a quick or easy one – the sale and acquisition of a franchise takes time. You also need to be realistic about your asking price, the truth is that buyers have choice out there in the market. In order to sell and maximize the sale price, it is necessary to plan the sale and execute your plan well.

In what ways can you sell your franchise?

There are a couple of ways in which you can sell your franchise. Firstly, it is possible to get your franchisor to assist in the sale process.  You will need to check your franchise agreement to see what role the franchisor can play and discuss this with them. Secondly, you could get the franchisor to sell the business for you and handle most of the sale without your assistance. Thirdly, you can consider selling only part of your business enabling you to retain some control and involvement in the life of the business