Looking to sell your franchise or business?
Find out how to maximize its pre-sale value and attract more buyers.
How do you add value to a franchise?
Before estimating the value of a franchise, you need to be aware of the various valuation factors.
Maximizing the profitability, sales and value of the franchise will enable the seller to make a profit on the sale.
Market performance, brand awareness and business development will all be analyzed to calculate the value of the franchise or business.
In addition to the date of creation, the buyer will have access to financial information and balance sheets, as well as a list of suppliers and partners.
Under the Doubin law, this type of disclosure is mandatory for franchise transfers.
Entrepreneurs wishing to take over a franchise will also focus on the financial and commercial aspects. The company’s accounts and balance sheets will be used to calculate its market value. The condition of the “outgoing” franchisee’s outlet will also be analyzed to draw up a list of the location’s strengths and weaknesses, including its accessibility and visibility to customers.
Steps to optimize the sale price of a franchise
How can I maximize the value of my franchise before selling it? It’s essential that the company enjoys a certain notoriety in its target market. Indeed, franchise networks can start by improving their brand image and reputation to continue to attract customers and increase the value of the franchise before it is sold. There are a number of marketing strategies, depending on the business sector, to continue optimizing profitability. These include loyalty programs and alternating promotional periods.
Intervening in supply chains is one way of effectively reducing costs.
Franchise networks may also choose to invest in training and skills development for employees or franchisees to ensure performance.
Revisiting market reach by exploring opportunities through the opening of new sites, while taking advantage of new technologies and trends, will also help maximize the value of the point of sale.
How do you choose a buyer?
Putting buyers in competition is one way of increasing the value of a franchise.
The more buyers there are, the higher the selling price.
The sale intermediary can then seek out candidates and put them in direct competition to maximize offers.
The intermediary will have to promote the franchise network in order to increase the value of the business.
The franchisee can rely on the buyer’s knowledge and motivation, as well as his long-term vision for the development of his outlet, but above all on the financial aspect.
The future entrepreneur will not only have to pay the purchase price, but also have sufficient overall investment to get the new business off the ground.
