Every business owner needs an exit strategy. Putting your business up for sale (and eventually selling it) can be a long, complex process; and if you want to tell a franchise business, things can get even more complicated.
In the entrepreneurial world, franchisees are in league all their own. So as you may expect, selling a franchise business will be a whole lot different than if you were to list an independent one.
As business brokers and restaurant real estate experts, we’re here to help. In this article, we’ll go over a few key things you need to know about selling your business as a franchisee.
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How to Sell a Franchise
One of the distinct advantages of selling a franchise business is buyer appeal. As a franchise owner, you know first hand about the conveniences and perks that come with running a business that’s part of a trusted, well-established brand. This is something that a lot of buyers are looking for when looking for a franchise resale.
Despite this, selling a franchise business is still a major process with countless variables that can make or break your sale. So if you want to get the best results possible, you’ll need to approach it the right way.
Can You Sell Your Franchise Back to the Franchisor?
Franchises are unique in a lot of ways – including what your options are when you wish to sell. Because your business is part of a larger corporate structure, your franchisor may have certain rights should you choose to sell – including the right of first, or the right to refuse.
On paper, selling a franchise business right back to the franchisor may sound convenient (and it certainly can be), but it’s not always the right move.
First, your franchisor may not even be interested. Second, this route isn’t always the best way to optimize your ROI. In Canada, there’s a strong market for franchises. As a seller, you’ll have a lot of opportunities on the open market.
Have more questions about owning a franchise? Explore these other blogs from our site.
- What Are The Best Franchises in Canada?
- Owning a Franchise: What’s in Your Control?
- How to Interview a Franchisor
Reach Out to a Professional
Just like selling a house, selling a franchise business requires help from a professional. Step one of selling a franchise is to reach out to a business broker or commercial real estate agent – preferably one who directly specializes in franchises.
Selling an active business is an incredibly nuanced process – even more so for franchises. Beyond reaching, negotiating with, and vetting potential buyers, you may also need to juggle the expectations and requirements of your franchisor.
A knowledgeable broker or agent is your best bet. They won’t just walk you through every step of the selling process, but they’ll also help you get the best possible return once your franchise hits the market.
Searching for a commercial real estate agent who can help you sell your franchise? Meet our team.
Contact Your Franchisor
If you want to sell a franchise business, you’ll need to tell your franchisor – ideally sooner rather than later. This isn’t always a fun conversation to have. However, it’s important not to delay or hesitate when communicating with your franchisor, especially if you’re considering selling.
Back when you first signed your franchise agreement, you may have acquiesced to certain stipulations or requirements that could impact your plans to sell. So it’s a good idea to be as proactive and transparent as possible.
Working with your franchisor is another area where working with an independent business broker or commercial real estate agent is invaluable. Leveraging their specific experience with these types of transactions, they can help you advocate for yourself to ensure you get the right support from the franchisor before, throughout, and after your sale.
Looking for more advice about selling your business? Check out these blogs next!
- How to Sell a Business in Ontario
- Selling Your Restaurant – What Happens After the Deal Closes?
- Can I Sell My Restaurant If It’s Not Profitable?
Don’t Skip Out on Preparations
Getting the best result from selling a franchise will require preparation. No matter how sought-after your franchise is, you’ll want to do everything you can to maximize buyer interest. This means having high-quality photos and videos, along with developing a well-thought-out marketing strategy to get the word out to potential buyers.
On top of making your franchise look nice and marketable, there are a number of key insights and documents you’ll need at the ready when it hits the market. Buyers will want to know about all kinds of key information like the fine print of your franchise agreement, ongoing expenses, business relationships, taxes, income, and more.
Part of the preparation process will be finding and organizing this information so that it’s ready when buyers start asking for it. Once again, your broker or real estate agent can help you with this step.
Ready to sell your restaurant? Carve Real Estate can help! Reach us at ryan@carverealestate.com or call 416-618-0054.
