What Makes a Franchise Sale Actually Close?
For every reason a franchise sale falls apart, there is a reason another one closes successfully. Some deals collapse for reasons no one controls, a fire, the death of a principal, a natural disaster, an environmental surprise. Set those aside, and most deals succeed or fail because of the people involved. Here is what the closed deals tend to have in common.
Buyer and seller agree from the beginning
Too often the two sides were never really aligned, or did not fully understand the terms. A vague offer with loose ends tends to unravel somewhere down the line. When the details are settled before the offer to purchase, and the agreement spells everything out, the deal has a far better chance. That means answering the buyer’s questions, and your questions about the buyer’s qualifications, up front. The key is that both sides completely understand and are comfortable with the terms.
Both sides keep their patience
Closing takes time. There are countless details to work through, and in a franchise sale you also have the franchisor’s approval to complete. Use advisors who are deal-oriented: unless something is illegal or unethical, they should be working to make the deal happen, not to win every point. Remember that your advisors work for you, that most decisions are business decisions for you to make, and that they should hold to the schedule, so long as you are not the one causing delays. Just as important, understand that nothing happens overnight. Knowing what keeps a deal on track to closing helps.
No one likes surprises
Be up front about your franchise. Nothing is perfect, and buyers know it. Reveal the negatives early, because they will surface eventually. Talk to your accountant about tax implications before going to market, and if financing is a question, raise it at the start. Deal with the concerns early and the closing becomes a formality instead of a crisis.
Both sides feel they got a good deal
When the chemistry works, everyone understands the terms, and both sides feel the sale is a win-win, closing is a simple matter. That feeling is built throughout the process, not manufactured at the end.
Frequently asked questions
Why do so many franchise sales fall apart before closing?
Most often because of misaligned expectations, surprises that surface late, or impatience. Franchise deals add franchisor approval, which is another reason to start early and keep everyone aligned.
How long does it take to close a franchise sale?
Usually several months once you include due diligence, financing, and franchisor approval. Patience and preparation are what get deals across the line.
What is the single biggest factor in a successful closing?
Clarity. When both sides fully understand and accept the terms, and the seller has been transparent, the closing is largely a technicality.
Ready to sell your franchise the right way?
Preparation and transparency close deals. Talk to Franchise Sellers about selling your franchise, or call 800-499-4280.