Selling a franchise location

Koelewijn & Partners guides you through the entire process of selling your business. If you want to sell your business, you will face fiscal and legal aspects, finding a suitable buyer, valuation, emotional and family issues, and your (financial) future. These are all obstacles that can be better tackled with good 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 thoroughly. As described below, several steps will need to be taken and various parties will be involved. Koelewijn & Partners assists you in this as an advisor and maintains an overview for you.

Valuation of your franchise business

Entrepreneurship is hard work. Over the years, you have built up your company step by step every day. Although you may not think about it daily, there will come a time when you will part with your business. Whatever the reason, selling your business is, at some point, a logical step to capitalize on its accumulated value. Many factors affect the value of a business, including:

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

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

Creating a sales brochure

After valuing your franchise business, it is important to develop a franchise sales brochure. This sales brochure helps you convince the right takeover candidate for your franchise business. The brochure provides the potential buyer with all the essential information that will give them the confidence to make the decision. The sales brochure will then become part of the Pre-Contractual Information Document, which prospective franchisees must receive in advance according to franchise law.

The franchise sales brochure

A franchise sales brochure can include the following topics:

• Explanation of the franchise formula
• Your history as an entrepreneur and reasons for selling
• Catchment area
• Market position
• Takeover option(s)
• Operation
• Indication of prospects
• Takeover conditions
• Takeover price
• Desired transaction date

The sales brochure a part of the Pre-Contractual Information Document

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

Selling a franchise location

When finding a takeover candidate, you should look for someone who wants to take over an existing location, is in a good financial position to buy your location (including property, inventory, and possible goodwill), and the prospective franchisee must be re-selected by the franchisor.

Franchise+: the platform for selling your franchise location

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 location!

Koelewijn & Partners as Acquisition Advisor

As you have read, selling your franchise location involves a great deal. This is to ensure everything is well-organized and to prepare the business transfer thoroughly. We can imagine that, besides running the business, you cannot dedicate your full time and attention to this. That is why we are happy to assist you as an advisor to guide everything in the right direction and keep an overview of the process. Want to know more? Contact us through the form below.