When the time comes to sell your franchise for whatever reason, you will have a lot of questions you need answers to.
Inevitably, one of these will be: can I sell my franchise business myself?
The short answer is – as with many things in life and business – it depends!
Of course, there is much more to it than simply deciding whether or not you want to manage selling your franchise yourself.
So to help you gain a deeper understanding of what’s involved when taking on your franchise resale process single-handedly, we’ve compiled some of the most important things you need to think about before deciding whether it is the right path for you.
And because asking whether you are able to sell your franchise yourself is such a big question, we’ve broken down our advice into smaller, more manageable queries to ask yourself.
Then, once you’ve considered everything, you will be able to make an informed decision.
What difference does having previous experience of franchise resales make?
Two key things to think about when deciding whether to take on selling your franchise business yourself is your personal experience and understanding of the resale process.
On the face of it, the franchise resale process may seem quite easy. You might think it goes something like this over the course of a couple of months:
- Decide on a value for your business
- Advertise it for sale on various online platforms
- Get enquiries and pick the best offer
- Undertake due diligence and agree a deal with your preferred buyer
- Enjoy having the money in your bank
The reality, however, is quite different.
For starters, the average time frame for reselling a franchise business is between 12-18 months. Although some resales can progress quicker, others might take years to sell – so it’s important you consider the potential timeline ahead of you.
And unless it’s a process that you have been through before as a franchisee, there are some specifics and nuances that it is really helpful to have some support with.
This doesn’t necessarily mean you must have a dedicated franchise business broker that works with you throughout the entire resale process. But, assuming you aren’t a seasoned franchise resales professional, you will certainly need some expert guidance at different stages.
Essentially, possessing a deep understanding of the end-to-end process – and having been there and done it – is really important to the success of selling your franchise on your own.
Begin to think about:
- Whether you have any previous experience of a franchise resale
- Whether you know of any franchise specialists who can assist at various stages as needed
- Whether you are confident in taking the lead on selling your franchise business
Do I have the right specialist contacts?
Having established working relationships with the right industry contacts is an extremely important element to consider when deciding whether you can sell your franchise business yourself.
Selling any business – especially a franchise – is a complex process involving a lot of legal paperwork and contracts. So let’s take solicitors as an example.
Legal support
Who would you turn to if you have any legal questions? What if you have contracts or agreements you need to draft, review, or thoroughly understand?
Unless you are a qualified solicitor yourself, it certainly pays to get the right specialist advice – ideally from British Franchise Association (bfa) accredited law firms. Enlisting the support of legal companies that specialise in franchising will save you a lot of time compared to going to another law firm you may already be familiar with.
As an example, if you have previously used a solicitors that specialise in family law and ask them for advice with your franchise resale, it is unlikely they will be familiar with the legal nuances within franchising.
As a result, they will ask lots of questions and waste a lot of time – theirs, yours, and even your prospective buyer’s. This is the last thing you want, because time really can kill deals within franchise resales. It will be costly from a financial perspective too.
Funding support
You must also consider whether you have valuable contacts who can assist your prospective buyer with funding.
Should your buyer require finance to complete the purchase of your franchise business, are they just going to approach their local high street bank one day and ask for a loan? This could represent a serious risk to the deal, as it’s far from guaranteed they will secure the required funding.
What is a far better situation is if you have direct contacts within the franchise business departments of said high street banks and other specialist lenders. These have a much stronger appetite for supporting individuals who wish to invest in a franchise business.
Ultimately, this question comes down to working out who your contacts are. Have you got a diverse network you can trust? Are any of these specialists in the many different aspects of franchise resales?
This will strongly dictate whether selling your franchise business on your own is a good idea, or if it’s worth considering getting support from an external specialist, such as Franchise Business Brokers.
Begin to think about:
- Whether your business network encompasses the right specialists you need
- What aspects of franchise resales will you need support with
- Who you can trust to support you and put your best interests at the forefront
How do I know if I am valuing my business properly?
When attempting to value your own franchise business, the first question you must ask yourself is: “Am I potentially over or undervaluing the business?”
Ultimately, the goal is to not leave money on the table by not valuing your years of blood, sweat and tears highly enough.
But when it comes to franchise owners trying to sell their business successfully, overvaluations are the most common issue. This will likely put off potential buyers who have otherwise got the necessary funding and skill set to take on your business.
If you commit to valuing your franchise business yourself, you simply must ensure you do not price yourself out of the market. If you do, it only adds frustration and time on to the already lengthy resale process.
You must also be able to defend the valuation if any questions around conflict of interest come your way: can you truly be objective when you are the one who gains most from a high valuation?
Equally, it’s just as critical you do not undervalue your business.
Unless you are a professional business valuer, you must also consider what is giving you confidence in the valuation you’ve decided upon.
Have you asked your accountant to assist with the valuation? If so, are they a specialist in franchising? Have they valued a franchise or helped in a franchise resale before? Or are they just an accounting generalist who is paid to minimise tax liability and tell you what you want to hear?
It is strongly recommended you use an experienced franchise specialist to get your business’ valuation figure right. This is to ensure you get a fair return on your investment, not only financially, but also for the time you’ve dedicated to building your business up.
Begin to think about:
- Whether you have the experience to confidently value your business
- Whether you are the right person to establish the true value of your business even if you do have the experience
- Whether a specialist franchise business valuer’s expertise will expedite the resale process
Am I marketing my franchise business for sale in the right places?
If you happen to be a franchise marketing specialist, then it’s quite possible the answer to this question is “yes”.
If you are not, however, you are going to encounter dozens of different franchise platforms telling you they’re the best place to list and sell your business through.
Many of these will keep telling you only they can inundate you with amazing enquiries and get you the most qualified leads. Equally, there are also some brokers out there who will gladly sell you the world in order to get your business.
On the contrary, we work differently. The Franchise Business Brokers team are very realistic when it comes to helping you market and sell your business. We only work with a select panel of partners and key marketing channels that we know from extensive experience will give you the best chance of finding a qualified buyer.
How to best attract attention to your franchise resale
When it comes to marketing the business, it is obvious that you must present the highlights and strengths of the business clearly and effectively.
But equally as important to the success of selling a franchise business is really diving deep into answering this question: if I were to continue running this business for the next five years, what would I do to really take it to another level? What are key three, four, or five things you would hone in on to really turn the needle and make this an even stronger and better business?
Selling the positive vision for the future of your franchise business is something we work hard to put great focus on. And it is proven to deliver fantastic results.
Begin to think about:
- Whether you are marketing your franchise business in the right places
- Whether you are marketing it in the right way
- Whether you could achieve more interest – and a bigger sale price – with the help of dedicated franchise business marketing experts
Do I have the time to sell my franchise business myself?
This is arguably the most important question of them all.
Quite often, franchisees will attempt to take on a lot of the resale process themselves, despite already being extremely busy juggling their business with their home life. What’s more, they’re trying to run their business in such a way that it not just maintains its value, but builds it too.
Does this resonate with you? If so, ask yourself whether you have enough time in the day to add the following to your to do list:
- Marketing your franchise business to prospective buyers
- Lead handling
- Guiding prospective buyers through the comprehensive due diligence process
- Answering the countless questions they will have on areas such as accounts, health and safety protocols, and employee/supplier contracts
On top of the extensive due diligence process with the prospective buyer, you will also need to consider the needs of your franchisor.
They must be satisfied throughout the recruitment and onboarding process that the prospective buyer is someone they want to welcome into the network, and thus will pose many questions to you about them.
Indeed, there are a lot of potential pitfalls to be aware of at every stage of the franchise resale process, all of which are a real drain on time. Therefore if you are looking to sell your franchise business yourself, you simply have to be confident you have that time to give – whilst also maintaining (and hopefully growing) the value of your business simultaneously.
At the end of the day, trying to sell your franchise yourself must not come at the detriment of your business.
Now it’s time to revisit the big question.
So… can I sell my franchise business myself?
Yes, it is absolutely possible to manage the sale of your franchise business yourself.
But should you? Well, that completely depends on your answers to everything else we’ve covered in this guide.
If reading this has made you realise you could do with a helping hand with elements of the resale process, the Franchise Business Brokers team are here to help.
Part of Chantry Group, we are the biggest and best team of dedicated franchise marketing and brokerage experts in the UK. We can help you with as little or as much as you need, from initial franchise valuations, through to the entire end-to-end franchise resale process.
Explore our website and franchise advice hub to find out more. And if you have any enquiries at all, please don’t hesitate to get in touch.
We look forward to helping you on your exciting franchise resale journey.
