Using a Business Broker to Sell Your Franchise
Whether you are a franchisee looking to resell your existing franchise to a new owner or a franchisor thinking of using third party assistance in the selling of your franchises,you will want to find a qualified buyer who is capable of making the investment and who will nurture and grow the business appropriately.
Whether for new franchise sales or resales, unless you already have a buyer in mind, such as an existing franchisee, a key manager, or a family member, you should consider working with a business broker to help you find the ideal buyer. Franchise business brokers act on your behalf to find you the best buyer. Brokers, or as they’re sometimes called, franchise consultants, usually have a lead list of potential franchisees and will qualify candidates based on your criteria. You pay brokers a portion of the franchise fee you receive for their services in helping you find a buyer, qualifying the buyer, and then streamlining the sales process.
Here are a few reasons to consider working with franchise business brokers when you’re ready to sell.
It Shortens the Sale Process
Because brokers already have leads—which they have already qualified—you don’t have to hunt for a buyer yourself. And because those leads have already been vetted, you don’t waste time talking to leads who, at the end of the day, don’t have the capital you require.
They’ll Help You Get You the Best Resale Deal
For franchise resales in particular, you may not have the first clue how to value your franchise, nor whether a given offer is a good one. Some franchise business brokers may be familiar with valuations in your industry, and could help you determine the right asking price.
If you’ve already found a buyer, the broker might help confirm whether or not you are getting a fair deal and aid you with the negotiation process.
The More Interest, the Better the Results You Can Get
The law of supply and demand certainly applies to reselling a franchise. If you have more buyers interested in your business, you should be able to command a higher asking price because of that higher demand. Brokers have specialized knowledge and experience in facilitating franchise sales, and know how to position your franchise.
And, for resales as well as new agreements, brokers also have processes to deal with many buyers and will be able to efficiently and effectively reach a much larger audience than you could on your own. Your ideal buyer may contact your broker about another business they have listed only to learn it is not a match or already sold. At that point, your broker can introduce the buyer to your franchise, positioning it as an appealing investment.
What to Know About Working with Business Brokers
Franchise business brokers are your intermediary in the sale of your franchise, and you should be able to rely on them to answer any and all questions, as well as bring you qualified potential buyers that match your ideal candidate profile.
Talk to multiple brokers before engaging one. When you interview them, be sure to obtain and check references as well as ask all the questions you have, which may include:
- What franchises have you represented?
- Where do you find your leads?
- Do you have experience selling franchises in my industry?
- How do you value a business?
- Can you help with sales contracts (franchise agreements)?
Hiring a broker to help you sell your franchise can make the process easier, help you find qualified buyers willing to pay top dollar, and simplify what can otherwise be a challenge for both franchisors and franchisees.
