Franchise Money Maker

Early Exit Strategies in Franchise Outlet Ownership
This article is written and owned by Lance Winslow

Greetings to Everyone, I am a retired Franchisor, Business Consultant, Philantropist and I run a Think Tank, as well as do a lot of Traveling

Many small business entrepreneurs like to start businesses, build them up, and then sell them. Once the business is up and running, making a profit, and has a good following of clientele, customers, and consumers they are ready to jump into something else. These people are really good at starting things, not so good at managing a large business, and don’t like to get bored, so they are always shifting around and changing the way they do things, and moving on. This makes sense for the entrepreneurial type individual and attitude.

However, when it comes to buying a franchise, and in building up the franchised outlet, and then selling it to the next party, there is a lot you must consider. Many of the stipulations in the franchise agreement and franchise disclosure documents prevent a franchise owner from selling their business to someone that is not approved by the franchisor. In other words, just because they have the money, doesn’t mean you are allowed to sell it to them.

If you are going to sell a franchise to someone, you have to know this upfront, and you aren’t really selling the business, you are transferring the rights for the remaining term of the franchise agreement.

Often the franchisor will have the new franchisee sign the “then current” franchise agreement. The new franchisee must agree to all the stipulations prior to the sale. And they will have to go through corporate training at franchisor headquarters at their own expense. These are all things that you must know in advance and also that many franchisors charge a transfer fee.

In other words, whatever you sell the franchise for, the new franchisor is going to take a good chunk of money. This could be anywhere from $5000-$20,000 depending upon the franchise system. So, I hope you will please consider all this before thinking about an early exit strategy for your franchised outlet ownership.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in franchising.

Article Source: http://EzineArticles.com/?expert=Lance_Winslow
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