Tom’s Franchise Information Blog

For a lot of business owners out there, they reach a point when they are ready to walk away from the business or sell it off. There are a number of different reasons why. Some choose retirement, other fall ill, relocation opportunities, and many, many other reasons. A franchise owner is no different from these business owners. Selling a franchise resale can be as frustrating as selling any other type of business.

It’s only a matter of time before a franchise owner will go through the process of selling their franchise. Unfortunately, many of those owners get involved in the selling process uninformed and unaware about what to expect. The result is endless amounts of frustration and usually a lower selling price than what the business is worth. Here are a few tips to help make the sale of your franchise much easier:

• Go over your Franchise Agreements. You’ll want to review the section which includes the terms of transfer and sale. Pay attention to the stipulations, if any, concerning to whom and for how much it can be sold. If it does, you’ll need to follow all of the steps necessary to prepare the sale to a third party. Be sure to verify your rights with the franchisor beforehand to avoid any misunderstanding.
• If you have any enduring and transferable contractual obligations, they should be revealed to the prospective buyer. Put in writing, a minimum of 10 days prior to the intended sale.
• Put together a written notice of your intent to sell. Don’t forget to provide all involved parties with the Franchise Agreement copy at least 30 days prior to the sale date. Read over the agreement first though and see if there are any stipulations which allow for a shorter notification period.
• Find a franchise attorney if you find yourself bound to the Franchise Agreement and there is no transfer and sale clause. Some even forbid the sale of the entity all together. Using the help of an attorney, you can probably find a legal means to exiting the agreement with no legal discourse without losing your investment.
• Have a nice sales package put together. Make sure your assets, employees, asking price, disclosure materials and any other pertinent information required by the city and state are included.
• Don’t be afraid to ask your franchisor for help. They usually have a list put together of prospective buyer contacts within your territory just chomping at the bit for an opportunity.
• Be prepared to answer any and all questions a prospective buyer will ask. Pay close attention to questions concerning your market, forecasts, and profit history. A nice list of facts and figures can help you pitching your sale.
• Let the prospective buyer that you will be willing to train or assist with setting up the business for its new grand reopening in order to instill confidence in the purchase.

Red Hot Franchises, at www.redhotfranchises.com, offers franchises opportunities. We feature low cost franchises, retail franchises, and other franchise categories.

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