In this episode, I cover some of the things you’ll need to think about if you’re considering selling your franchise. I’ll talk about pinpointing a realistic value, reasons why you and others may consider selling, as well as alternatives to selling your franchise. There is always a solution—listen to find out what that could be!
This is one of the best reasons to sell a franchise. If you’re able to take a struggling franchise, turn it around, then sell it for a profit—it’s a win. If you currently own a business and are ready to let it go for another opportunity, it's the best-case scenario.
I’ll let you in on my #1 strategy when you’re selling a business: sell your business to start a new one. Take the profit and invest it towards purchasing your next franchise. I try and do this every year to help mitigate the tax burden associated with making a profit.
It takes strategy and learning how to listen to your gut. Listen as I talk in-depth about this strategy.
If you’re in the market to buy, this is the burning question in the back of your mind. You have to do your own research, but here are some of the biggest reasons:
They’re trying to mitigate risk and are ready to slow down and/or downsize.
A life-changing negative event happens (death, illness, lifestyle change, etc.)
Their focus or priorities have shifted.
They’re ready to move on to a different brand.
Industries shift and laws change and profitability is different.
Whatever the reason, make sure it works for you and what you’re looking to accomplish. If you’re looking to grow your portfolio be open to unusual opportunities. Always keep your ears open.
I’m an advocate for sticking it out and not quitting when the going gets tough. But on the flip-side, you need to know when it’s time to quit. Is your life worse running a business? Do you enjoy being an entrepreneur? Or would you rather go back to a 9 to 5? If your heart's not in it, you can’t expect to run a profitable business.
So in that case, choose a path forward that brings you happiness—make the decision that is best for you and your family. But be honest with yourself. You need to let go of your franchise for a reasonable price. If it’s hemorrhaging money because you’re holding out for a higher price, you’ll end up losing far more. It’s all a learning process, right?
Don’t panic. If there isn’t interest in your market, you do have some options available to you. I recommend hiring an operational manager. Find someone eager to learn and looking for a mentor who can relieve you of some of the day-to-day stress. You may have to give up a small amount of equity—but it’s a win-win for both of you.
Before you even make a purchase, if you plan on being a semi-absentee owner, it’s smart to consider investing in a franchise with partners. The role for everyone would still be to “manage the managers” but it mitigates the role you play. Working in your business as an owner devalues it, so hire a dream-team of decision-makers.
To hear more on the topic and the rest of my tips regarding selling a franchise, listen to the whole episode now!