How Selling a Franchise Differs From a Stand Alone Business

							How Selling a Franchise Differs From a
Stand Alone Business
Selling a franchise is different than selling a standalone business. Selling a franchise can be
beneficial since the customers are loyal to the business not the owner. For example, if you buy a
burger at McDonald’s you probably don’t care who owns the joint but you do care about the
burger. Franchises can be easier to sell over stand alone businesses.

Small businesses can be harder to sell because they are reliant the entrepreneur owners, where as
a franchise business has the clientele that simply follows along because of the franchise “name”
itself. There are millions of dollars worth of marketing done each year to promote that franchise
name and product line.

A small business can be harder to sell because the plan to success is inside the founders head,
whereas with a franchise, the system is in place that works and the training is included, along
with ongoing support that ensures each franchise has a blueprint to success at their fingertips.

There are however some challenges to selling a franchise. Let’s look at those:

1. Restrictions and Transfer Fees

Franchisors keep control of most aspects of the franchisees so the approval process for a
potential buyer can be quite intense. Some franchises have restrictions that do not allow the
franchise to sell for a specific number of years. There are also generally high transfer fees,
mandatory training fees, and other fees that are worked into the franchise agreements. They are
often a surprise to the franchisee.

2. Fewer Potential Buyers

The majority of potential buyers don’t want to be tied to the rules and restrictions that franchises
have, making them more difficult to sell. You either love or hate franchises, so while the buyer
pool is smaller and you may find yourself waiting a little longer to find your buyer.

© 2011 Apptivo Inc. All rights reserved.
3. Competing Directly With the Franchisor

The drawback to selling a franchise is that the buyer really doesn’t need you because they can
purchase a franchise directly from the franchisor. It’s a good idea to understand the rules of
selling a franchise when you initially buy that franchise.

Franchises are a popular choice for many who want to enter the world of owning a business, but
who feel they don’t have the skills to go it alone. When it comes to selling your franchise the
success of that franchise itself can also help to sell your business, but it pays to know the rules
surrounding the sale of a franchise.




© 2011 Apptivo Inc. All rights reserved.