Selling A Franchise

Before you get started with your franchise, it’s worth considering how you will plan your exit strategy at the right time. Do you intend being a franchisee until you are of retirement age? What if circumstances mean you need to put your business franchise up for sale? Do you want to plan an exit date from your franchise?

Such considerations in some ways can be overlooked when starting up a mainstream business, but it pays to be ahead of the game with regards to selling a franchise business.

Consider thinking carefully about your intentions and communicate them with your franchisor. They can then be prepared if you need or want to sell the business and will be able to provide you with their parameters and rules.

Numerous reasons may come in to play such as set periods of time, once you have made enough money, you could leave to start up your own business, or maybe you’d like to take up another franchise in a different sector, ill health and many others can be the reason for selling a franchise.

How to sell a franchise;

Whatever your intentions, set yourself goals and achievable timescales so that when it’s time to move on, you will have an exit strategy in place and a business that is worth selling. It is also possible that you will potentially not have the final say on any successor. Often, any buyer has to be approved by the franchisor which means they might be open to the same selection procedure as you were ie. Financial, experience and other suitability factors. It is possible that someone you feel may be worth selling to might not actually meet the correct criteria in many ways.

It is also worth thinking about how to go about selling a franchise. Where to advertise – trade magazines, specialised web-sites, local transfer agents are all options. Possibly, the main franchisor will already be advertising and have potential buyers in place. Often, a multi targeted approach is best.

The Motivation Cog in the Franchise Business

Finding the right person to be a franchisee for your business should be a simple thing. Someone says “Boy, I’d love to be a member of your team. Where do I sign up?” and voila! You have a new franchisee all set to make their mark with your brand and bring you mega profits and wonderful exposure along the way. Unfortunately, life and making that just right match are not necessarily all that simple. Your business is a complex entity with many aspects that must be carefully considered and matched with a prospective franchisee so that both your company and the franchisee can profit from the arrangement. It’s rather like two cogs that are attempting to mesh. If the individual cog -or aspect- does not fit well into the space on the reciprocal wheel, then someone is in for a bumpy ride.

So how does one locate the perfect potential franchisee? Actually one of the first steps should be an assessment of your company’s “lifestyle”- those things that make your company what it is. We are talking about such things as management style, leadership style, and how your company motivates its employees and franchisees. Once you know where your company stands on such things, then it is going to be easier to make sure your potential franchisee fits, that his or her ‘cogs’ mesh well with the company’s wheel.

Let’s take a look at just one cog: motivation. Motivation is that thing that prompts us to move in a certain way. And it is our personal value system that sets the stage for the motivation. What we value pushes us in our decisions regarding what we spend our time, energy and money on and what experiences we seek, in other words, our buyer motives. You have probably heard it said that you can tell what is important to a person by looking at their checkbook stubs. If we update that, then it’s their debit and charge card statements, and their PDAs. The part of this that is important here is that what is motivation for one person is not necessarily the same for everyone else. Therefore, it follows that as a franchise business it makes good sense, good business sense, that a potential franchisee’s motivations which are based on a personal value system, be in accordance with a franchise business’s motivations and business value systems. Those seeking to become a franchisee should be seeking an experience that mirrors the same type of value system they have. And those who are looking for a franchisee should ensure that there is a mesh between them and their new partner.