Everything You Need to Know About Buying or Selling a Franchise

Buying or Selling a Franchise

In this article, we're going to talk about franchise businesses and a few things to consider if you're in the market for buying or selling a franchise business.

Why Franchises Can be Good for You

Franchises can be great businesses, especially for first-time business owners in the market to find an established process or roadmap that franchisors put together for their franchisees. There are expenses to consider involved with owning a franchise. Every franchise is different but many of them take a percentage of revenue and some marketing fees. Regardless, franchisors can be great to lean on for referrals, and they can steer you in the right direction as a business owner. Maybe you have run a few franchises in the past and you are looking to continue adding to your portfolio. If you are in the market to either sell your franchise or if you are looking to buy one there are a few things to consider.

What to Consider When SELLING a Franchise

If you are selling, the first thing you should look at is your franchise agreement. There is usually language covering the process and any potential expenses for all parties. Then you should speak with your franchisor about your plan and what the steps will look like moving forward. From there, it is safe to take a leap forward into the selling process.

What to Consider when BUYING a Franchise

Now if you're in the buying process, you have a couple of different options. You can either reach out to a franchisor for that business or reach out to a local M&A advisor on potential businesses that are available for sale. While going through this process, understand that there are going to be additional fees, such as transfer fees and marketing fees, while transitioning a franchise from one existing owner to the next. Every franchise is different but there are common factors to consider when buying one. Most franchisors will have a handful of documentation that they need to approve such as a lease, contract, and different agreements between both parties. Usually, it’s a pretty simple process but it is much easier when you keep your franchisor or advisor in the loop.

Black Diamond would Love to Help

If you are in the market to buy or sell a franchise business, we, at Black Diamond Capital Advisory Firm, are more than happy to help.