Selling a franchise business differs from other types of businesses because of the special relationship you have with the parent company. It is a good idea to work with Bryan business attorneys when selling your franchise to ensure that you don’t erroneously break any of the terms of your franchise agreement.
Your franchise agreement may allow you to sell the business to another party, or it may require you to sell it back to the franchisor, or parent company. Even when you are allowed to sell the business to another, you will likely need to abide by specific terms outlined in the franchise agreement. In some cases the franchisor will assist you in finding a buyer.
Steps in Selling Your Franchise
Prior to putting your business up for sale you will need to review the franchise agreement to determine any restrictions that may apply. Assuming that you are allowed to sell the business to a purchaser other than the franchisor, you then need to hire a commercial real estate appraiser. Much as with private real estate, the appraiser will compare your business with similar businesses that have sold recently in your area. The appraiser will also conduct an inspection of the premises and review your income and tax records.
You will then need to put together a profile of your franchise that describes the following:
- The type of business
- Local regulations that affect the business
- Your average annual earnings
- A listing of your assets, including equipment, vehicles, etc.
- The asking purchase price
There are numerous websites where you can list your franchise. Your attorney can assist you with which ones are best to use.
Determining the Purchase Price
The appraisal will provide you with a good indication of the price you should ask for your business, but you are not bound by this figure. However, if the terms of your franchise agreement specify that you must sell the business back to the franchisor you will likely not be in a strong position to negotiate the purchase price.
For Assistance with Selling Your Franchise
If you plan to sell your franchise business, it is in your best interests to work with Bryan business attorneys who can assist with interpreting the existing agreement and drawing up contracts. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.