When you start shopping around and comparing franchise opportunities, how you’re going to exit the business is probably the last thing on your mind. Unless you really want to spend the rest of your life running the same business, it’s useful to start considering how you might transition into something else after your business becomes successful enough to run without your constant attention.
Planning an exit strategy before choosing a franchise allows you to pick an opportunity that best fits your desires and plans for the future. It also ensures there’s a plan in place if you become too sick to work or something unexpected happens and your family knows what to do with the business. Here are some tips on what to consider when formulating your exit strategy.
Consider Your Goals
First, think about where you want to be in the next 10 or 20 years. Do you want to be retired or building your own business from the ground up? Knowing when you want to achieve certain goals can help decide which franchise is right for you based on projected growth. If you want to be retired and living on the beach in just 10 years from now, you’ll need a fast growing opportunity that can provide you with a sizeable profit when you decide to sell. Knowing you want to run your own non-franchise business can help you choose a model that includes plenty of education and support to help you build the skills you’ll need as a founder.
Check The Restrictions
Before jumping feet first into any particular franchise, find out how they handle selling or transferring businesses. Many franchises include first right of refusal clauses in their contracts that require you to give them a chance to buy back the branch before you can offer it to anyone else. Others stipulate that they must approve the next owner before you can finalize the sale. These kinds of restrictions also apply in most cases when you want to hand down your business to your children or another family member, either before or after your death.
Ask About Assistance
Will the franchisor provide any assistance in finding the perfect buyer for your business? If you’re hoping to exit relatively quickly to move on to other opportunities, it’s essential to choose a franchise that offers this kind of support. Being matched with an experienced and financially sound buyer streamlines the entire process from closing the deal to transferring the actual daily operations of the business. Most franchisors offer some kind of selling assistance because, without it, they could end up with a member who does not meet their criteria.
When planning your exit strategy, enlist the help of an experienced franchise lawyer. Having a knowledgeable professional look over your contracts ensures your plans line up with the requirements set by the franchisor.
Shelton Law & Associates exists to help entrepreneurs like you with all aspects of their business. Our law firm is simply the best choice when it comes to areas of franchise law and we would be happy to answer any questions you might have.