Many times, as a franchise owner, you consider if it is a good idea to sell your franchise. You may have thought you bought a business then three years later you realize you bought a job and are not sure if it’s a good fit anymore. You might be ten plus years in, doing great, and then wonder if the time is right to get out at the top. Maybe the culture or ownership of the franchise system has shifted, and you are not sure you fit with the new systems, support, and culture as you did before.
I have just put together what I call my “Know, Grow, and Go” strategy to help you on this journey and to answer some of the most critical challenges you will face. The following article will point out the top six critical things you need to consider when you are asking the question, “Should I sell my franchise?”
Should I sell my franchise is one of the topics that my team is frequently asked. Recently, my staff cried uncle and said, please, just write a blog on this so we have somewhere to send people for information. Before I jump in, I will share a little backstory about myself. I have been a franchise owner in three different systems over the past twenty years. In some cases, I have sold those franchises very successfully and, in others, it was a complete loss. Last year my team and I launched our own franchise system, www.highachieversfranchise.com, that was built with the franchise owner in mind and gently constructed with empathy for the franchise owner. As a
Go→ Get out while the getting is good
I cannot put enough emphasis on this one! When asking if you should sell your franchise, there’s a time to buy, there’s a time to sell, and there’s a time to run. One of the greatest challenges that you have is figuring out the timing of all of this. If the market for your product and service is good and your company has been growing, then it could be a really good time to look at selling the franchise. Take time to study the trends in your industry and look for potential headwinds. By headwinds, I mean to take a look at the health of your industry, brand and franchise units. If it looks like the industry is very healthy, but in the next three years it will be even better, then this Go franchise selling strategy should be checked off. If you see the headwinds are in your favor, it’s definitely the time to sell and make a change.
Go→ Go All In when asking, Should I sell my franchise?
Part of going all-in is building a marketing plan around selling your franchise. Who is your target market? How are you going to find them? Who is the ideal buyer for your franchise and how would you encourage them to take action and buy? Just like marketing to your customers, it’s incredibly important to have a plan if you want to sell. Also, you can’t let anything slip in your business while you are doing this. It will take some time to sell. You have to run it just as effectively as always, while at the same time selling it. These are actually two very different skill sets to manage. You may need to get outside help or consulting in order to accomplish this and attract the right people to your franchise.
Grow → Build it and own it like you’re selling it
Make sure everything is very process oriented, e. g., having all your standard operating procedures information, your insurance policies, your support policies, your human resources policies, your customer data, and all manuals up to date. Make sure that it is all dialed in and precise leaving the potential buyer with no questions or blemishes to point out in the process. The more process oriented and systematized your franchise is, the easier it will be for a buyer to buy it and, most importantly, successfully transition so that your business continues to provide great service to your clients. How many times have you walked into a small business and, based on the experience, knew that the business has been sold? You don’t want that happening in your business. I recently had this happen with one of my favorite barbecue places, and it was so disappointing that I may not go back.
Know→ Know
Take time to ensure that all your numbers are current, make sure your taxes have been handled correctly, and be sure that your financials are spotless. This will be a critical point for any buyer who is interested in buying your business. If you happen to be in business services, you should be looking at a margin of at least 30% in your business. If you know what your numbers are and you know what you’re making, then you will have the confidence to ask for the right price for your franchise or small business. Also, have a conversation with your CPA and your business attorney to let them know that you are considering selling your franchise and will need their assistance on this journey. You need to be as squeaky clean and transparent as possible with your potential buyers. If you are unable to feel confident in opening your books to the potential buyer, this lack of confidence will send up red flags and potentially lose the deal for you.
Grow → Create a great goal for yourself
When you are considering selling your franchise, having a smart goal is a very good thing to start with. This could be something you’ve always wanted to do. Maybe it’s that vacation you have been putting off or that awesome new house you want to move into. One of the goals that my wife, Kimberly, and I created when we sold the last of our franchises was to purchase our dream cars which for her was a Tesla Model X and for me a Tesla Model 3. This is a really compelling goal for us because, not only are they awesome cars and a self-driving technological marvel, but they fit into our sustainability focus. Driving electric vehicles was very important to us since it allows us to lower our environmental impact. This goal was very motivating for us. We set a realistic goal and followed the plan that set a time and placed a value important to us. This helped us focus on what was important as we hit the ups and downs that come when you are selling your franchise.
Know → Be clear on your vision and your next steps
When you are asking, “Should I sell my franchise?” You should start to consider: Are you retiring, traveling, or leveraging your success to do something else? Busy, productive people tend to fall into the latter. In my case, selling the franchises that I owned was just a natural progression and a successful stepping stone to building the global organization that I am a part of today. You need to have a clear outcome goal as well as a performance goal. Full retirement is overrated for most entrepreneurs. So, as you consider selling your franchise, you should ask yourself, “What is the next chapter for me and my family?” Will I grow something else or will I invest in something bigger? Will you take an extended break or is selling your franchise the first step in a much bigger journey?
If you are considering selling your franchise and are interested in having a conversation with a team of experts who will come along beside you in this journey, please, reach out to us. We can provide you with coaching, consulting, advising, planning, and goal setting. If you fill out the form below, we will schedule a time to go through a franchise selling assessment. When you move forward with our Nexpert Coaching Program™, we will also provide a toolset that will help you organize all the information you need to prepare for the sale of your franchise.
I have over twenty years of experience in owning, developing, and selling franchise systems. I’ve owned several different brands and several different franchise systems that I bought, sold, and some I have run from along the way. I have written a best selling book and have several other books that will enable business owners to achieve more. My journey has left me wanting to do more to help the local business owners around the world achieve more and have better harmony in their lives and work. I have a deep passion for empowering the world to Embrace A Lifestyle of High Achievement™. I know that with a growing community of local business owners, partners, coaches, and the team members at High Achievers®, we can make a huge, positive economic impact on the local communities.
Franchise opportunities
Business mastermind groups, peer to peer advisory boards, business coaching, and consulting are a quickly growing marketplace that has many opportunities. If you are a business consultant, advisor, or coach who is looking for extra revenue streams and lead generation this is a perfect opportunity to become a local business hero. We have franchise opportunities in the US and around the world. Find out more at www.highachieversfranchise.com or call us at 888.311.9595.