An important part of selling an ongoing franchise is to keep the franchisor involved in the process so that there are no suprises or challanges when it comes to complete the deal.
"If you own a franchise and are ready to sell, do not forget about the franchisor because they are an important part of selling your business. Much like your landlord, you will need to work with them throughout the deal. Ultimately, you will need the franchisors approval of your buyer before the sale can be completed. It is always a smart policy to try to keep a positive relationship with the franchisor.
Once you are ready to sell, you or your broker should contact your local franchise representative. Let them know that you are ready to sell and they may be able to pass on buyers interested in purchasing your business.
The following are questions you will want to ask your Franchisor before you put your business up for sale:
1. Is there a transfer fee? If so what is the cost and what does it include?
2. What does the franchise look for in qualifying a potential buyer? (amount of needed capital, assets, credit score, etc.)
3. What is the process of qualifying a potential buyer? (interview, application)
4. How long does the qualification process take?
5. What are the details of the franchise agreement? (renewal fees, royalty fees, terms of current contract)
6. Are there any upgrades or improvements that the franchise will require the new owner to complete after the sale? If so, what is the estimated cost of them?
Make sure you have your copy of the current franchise agreement to provide to your broker. Have the general details of the agreement, but remember that buyers will want to review the entire contract during due diligence.
Finally, be sure to keep your franchisor "in the loop" as you proceed with the sale. Their help in the sale is essential to a smooth deal."
About The Author: Joe D. Robertson, CBB is the broker / owner of Southern California Business Broker. Joe has over eighteen years of experience owning, operating and selling successful businesses. Joe can be reach by phone at 949-307-3817.
Watch for more blog posts / articles from me in the future!
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services
Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.
|Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses
Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.
|Diane Boudreau-Tschetter: Escrow And Bulk Sale Services
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
|Helen Yoo: Escrow & Bulk Sale Services - Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Steve Zimmerman: Restaurant Broker Specialist
Steve founded Restaurant Realty in 1996. He has personally sold/leased over 900 restaurants, bars & clubs, & completed over 3000 valuations. The author of "Restaurant Dealmaker - An Insider's Trade Secrets For Buying a Restaurant, Bar or Club" available on Amazon. Reach Steve direct at 415-945-9701.
|Brad Steinberg, Broker - Laundromat Specialists
PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.
|Elizabeth McGovern: Escrow Services - SF Bay Area
McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
|Larry Larsen, Broker, Laundry Specialist - Orange, LA Counties
I have over forty years of experience in the sales, ownership, management, and construction of coin laundries. He is a licensed broker active in the sale of coin laundries, a licensed insurance agent specializing in coin laundry insurance.
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