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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) 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.
Pre-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 includes a
business 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.
As far as
developing a business profile, most professional Business
Brokers are very good at helping business owners at
organizing and preparing a professional business profile
which can be an instrumental tool in the sales process. A
professional and comprehensive summary profile can also be invaluable in
ultimately saving time for both the Seller and Buyer.
Pricing Your Franchise to Sell
Industry
sales statistics indicate that the #1 reason why most small
businesses and franchises don't sell is because they are
overpriced. It’s very important for business owners/sellers
to establish a realistic and credible asking price for their
business that can be supported on a number of levels,
including financial history and market comparables. You
should consult with your franchise company or other
franchise owners in your system about recent re sales in the
market to give you an idea where the current market is.
You may
also want to find and consult with a local
Business Broker in your area about demand and supportable pricing guidelines
for your type of franchise business. It’s also important in
most cases to offer terms to the prospective buyer because
the majority of small business acquisition deals will not be
acceptable for bank or SBA financing.
Confidentiality
Unlike the
sale of assets like real estate, maintaining the
confidentiality of a small business sale can be very
important to the owner/operator for a number of reasons.
It’s not unusual for employees, customers, and even vendors
to become very concerned (or worse) if they become aware
that the business for sale. Competitors may also use the
knowledge of the business being on the market to gain
certain unwanted and untimely advantages.
The best
way to maintain the confidentiality of a sale is to hire a
professional Business Broker or intermediary that has
experience in confidentially marketing businesses and
franchises for sale. This includes providing services such
as screening, qualifying, and requiring prospective buyers
to sign a non-disclosure agreement before releasing any
confidential information.
Marketing & Advertising Your Arizona Franchise For Sale
Franchise
owners today have a number of options when deciding how they
can market and advertise their franchise business
for sale. This includes going the “for sale by owner” route
which has advantages and disadvantages. The biggest
disadvantage being the potential loss of confidentiality and
the possible negative effects it may have on the business
and its chances of selling. The biggest advantage of a “for
sale by owner” transaction is the owner obviously is not
responsible for paying a commission to a Business or
franchise Broker.
Still the most
common option franchise owners choose when selling a
franchise is to hire a professional business or franchise
broker to handle the sale. Most brokers are only paid a
commission after the sale is completed, so there is usually
no up front expenses. They are also familiar with their
local market and buyer demands, and can help maintain
confidentiality as well as prepare and price a business for
sale so that it has a good chance of attracting a qualified
buyer.
As far as
advertising, most brokers also employ a number of local and
national “business for sale” web sites that can give a
listing maximum & confidential exposure to prospective
buyers. They also commonly work (or co-broke) with other
professional brokers in their area that might have a
prospective buyer for your business.
About
Author:
Ray Haiber
has 10 years experience as franchise sales consultant as
well as a professional small
Business Broker in Arizona. To view and research
franchise opportunities for sale throughout the USA,
including existing franchises for re-sale, visit
http://www.azfranchises.com
Please feel free to contact us directly
at 602-292-0553 if you have any questions. Or feel free to
request a free small franchise business
valuation.
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