Sale Value of a Business is Higher when It’s a Franchise
A little known fact in franchising is that, when a franchise owner decides that they want to leave the franchise, their business is typically valued at more than what the average “Mom and Pop shop” is valued at. Even if all other factors are the same, a franchise can request more cash for their sale. Why? Because when a franchise is sold, the buyer isn’t getting just the experience of the former business owner, they are also getting an entire system of support with the franchise.
Buyers who purchase businesses usually have more capital to spend. Buyers who purchase existing businesses look for a couple of things: existing clients, existing cash flow, an ability to grow, and employees. With a franchise, all these things are organized and easy to deliver to a buyer because the franchise has systems in place to manage data, cash flow, customers, and employees. They have professional marketing materials and a professional sales team to help you sell the business when you are ready. The average “Mom and Pop shop” would struggle to compete with all of these advantages.
After all, wouldn’t you want to buy a business that looked nicer, was more organized, and had better support long term? If you said yes, you are like most other sophisticated buyers who favor franchises as re-sales. So what does that mean to you? If you are buying a franchise now and doing the hard work to build it, your payday on the other side can potentially be much larger than you anticipated. As Stephen Covey says, always “begin with the end in mind.”
Give franchise consultant Vicky Tade a call today to discuss this article and chat about different franchise concepts to see if they are right for you.
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