Selling a franchise establishment

Koelewijn & Partners guides you through the entire process of selling your business. If you want to sell your business, you will face fiscal-legal aspects, finding a suitable buyer, valuation, emotional and family issues, and your (financial) future. All these hurdles are easier to overcome with proper preparation. Due to emotional involvement and complex matters, there is a tendency to postpone succession issues. Other matters demand your attention. However, it is very important to prepare this phase of your business well. As described below, various steps need to be taken and different parties are involved. Koelewijn & Partners supports you in this as an advisor and maintains an overview for you.

Valuation of your franchise business

Running a business is hard work. Over the years, you have built your company up bit by bit every day. Although you don't think about it daily, there comes a time when you will part from your business. No matter the reason, selling your business will eventually be a logical step to cash in on the accumulated value. Many factors influence the value of a business, including:

• Life stage of the business
• Location
• Dependence on the owner for success
• Historical performance
• Future outlook in the industry
• Interest rates
• Economic trends

Valuing a franchise business is not easy. Various elements need to be reviewed. Koelewijn and Partners collaborates with different parties who can calculate the valuation for you. Besides the valuation, it is important to also involve other parties such as the accountant, lawyer, notary, and tax advisor.

Creating a sales brochure

After the valuation of your franchise business, it is important to develop a franchise sales brochure. This sales brochure helps you in convincing the right takeover candidate for your franchise business. The brochure provides the potential buyer with all essential information, giving them the confidence to make the decision. The sales brochure will then become part of the Precontractual Information Document that prospective franchisees must receive beforehand according to franchise law.

The franchise sales brochure

A franchise sales brochure may include, among other things, the following topics:

• Explanation of the franchise formula
• Your history as a business owner and the reasons for selling
• Service area
• Market position
• Purchase option(s)
• Operations
• Indication of prospects
• Purchase conditions
• Purchase price
• Desired transaction date

The sales brochure as part of the Precontractual Information Document

In addition to the sales brochure, a Precontractual Information Document should also be handed over. This must be shared if the prospective franchisee has indicated serious interest in taking over your franchise establishment and joining the franchise formula. This document should be drafted in collaboration with the franchisor and must be tailored to your specific location. After receiving the Precontractual Information Document, the takeover candidate is entitled to a standstill period of four weeks during which they can develop the necessary plans and possibly seek external advice. Therefore, it is wise to start in time if you want to sell your franchise establishment. Experience shows that this process often takes longer than initially estimated. This is partly because of the standstill period and other steps that the takeover candidate must take, such as going through the franchisor's selection process and obtaining financing.

Selling a franchise establishment

When finding a takeover candidate, you need to find someone who wants to take over an existing establishment, who is in a good financial position to purchase your establishment (including premises, inventory, and possible goodwill), and the prospective franchisee must be reselected by the franchisor.

Franchise+: the platform for selling your franchise establishment

Franchise+ is our sister company and the starting point for prospective franchisees looking for a franchise formula. The platform is visited annually by numerous prospective franchisees. They have a wide reach and can help you like no other in selling your franchise establishment!

Koelewijn & Partners as acquisition advisor

As you have read, a lot goes into selling your franchise establishment. This is to manage everything well and prepare for the business transfer appropriately. We can imagine that, on top of running the business, you cannot devote your full time and attention to this. Therefore, we are happy to assist you as an advisor to manage everything well and maintain an overview of the process. Want to know more? Please contact us via the form below.