1851

Since 1851, business owners across the country have been using <a href="https://1851franchise.com/details/5440/Why-Businesses-Choose-to-Grow-Through-Franchising">franchising</a> to take their businesses to the next level. They grew as much as they could on their own, then decided to offer their established, successful brands to entrepreneurs who open new locations through their own funds, with the support of the franchisor. For many franchisors, growing their systems with franchisees has helped them expand much quicker than if they tried to do it all on their own.

However, there are many cases when a franchisor grows quickly through franchising, then finds themselves stuck again. Maybe they&rsquo;ve outgrown the span of their knowledge base and don&rsquo;t have the capital or expertise to continue growing. Other times, someone might have spent years building up a franchise system and is ready to monetize the wealth rather than having it tied up in the value of the business. In either situation, the franchisor starts thinking about ways to get an investor&rsquo;s attention.

<a href="https://inclineequity.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=tips-for-preparing-your-franchise-system-for-sale-2704626" target="_blank" rel="nofollow">Incline Equity Partners</a> Partner Wali Bacdayan is a private equity expert and consistently hears from franchisors looking to sell their systems for various reasons. While the most common reasons franchisors reach out to Incline are for help growing or for monetizing their business, Bacdayan says that some franchise systems are more attractive to the private equity firm than others.

&ldquo;The situations that are typically the most attractive are the ones where a franchisor&rsquo;s team finds themselves stuck,&rdquo; Bacdayan said. &ldquo;That&rsquo;s the realization that most owners come to eventually &ndash; they&rsquo;ve grown broader than they could have imagined and need some help, whether it&rsquo;s strategic counseling or money. On the other hand, someone else might be 65 and prefer to retire on the money than having it tied up in the business. Those are the two most common situations, but of course there are other exceptions as well.&rdquo;

Whether or not you&rsquo;re thinking about eventually selling your franchise system, there are a few things you should start doing right away in order to best attract investors down the road.&nbsp;

Maintain comprehensive information on your system.&nbsp;

The first, and perhaps most important, thing you should do is ensure that you have good information laid out about your franchise system. Any data relative to how the franchisees are doing, how your royalty streams are coming in, documentation on processes and procedures, material on how you communicate with franchisees, system wide policies &ndash; basically anything that will help facilitate someone to analyze the system &ndash; should be very organized.&nbsp;

&ldquo;Perhaps the biggest mistake we see franchisors make is not having access to all of that info,&rdquo; Bacdayan said. &ldquo;An investor wants to know the health of the system and how well the franchisees are run. It&rsquo;s hard to grow a system if it already has an unhappy franchisee base, and while a lot of franchisors do have anecdotal evidence on the happiness of the system, many don&rsquo;t have exact data or feedback.&rdquo;&nbsp;

Once all of the information is in place, a private equity firm will be able to simply see what you have established, what your franchisee base is like and what your target franchisee looks like. That way, you can analyze together how you&rsquo;ll be able to grow with private equity funding.

Be prepared to discuss your corporate management team.

The next step, after analyzing the current franchisee system, is much more qualitative. The investor will want to see who will be continuing to lead the business &ndash; is it someone who is ready to retire and make an exit? If so, they&rsquo;ll want to know who will be left on the management team. Will they need to recreate the management team from scratch, or will the leaders just need some advice and capital?&nbsp;

&ldquo;From this point, it&rsquo;s largely a &lsquo;fit&rsquo; discussion,&rdquo; said Bacdayan. &ldquo;You&rsquo;re looking for a partner who can help you accomplish things you don&rsquo;t think you can accomplish on your own, so it&rsquo;s getting to know someone like us and how we might align on how things get done so that once we do agree on objectives, you find yourself with someone you want to work with.&rdquo;

While Bacdayan might prefer to work with a team that will be sticking around, some investors are happy recreating a management team for a retiring franchisor. There are a wide range of private equity investors, and a large part of selling a franchise system is finding the right partner that will help achieve long-term goals.&nbsp;

Selling a franchise system can be a lengthy process. Even after the conversations with investors begin, it might take anywhere from three months to over a year, but ultimately, for the benefit and well-being of both parties, it&rsquo;s important to find the right partner for you and your business. So, knowing that you won&rsquo;t be able to sell your system overnight, it&rsquo;s important to keep things well-organized and documented as soon as possible in order to set yourself up for future success.

Franchise Planning, Franchise Development, Franchise Sales

Tips for Preparing Your Franchise System for Sale

1851 Franchise

Whether you plan to sell your franchisee next year or in 20 years, start setting yourself up for success now

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

tips-for-preparing-your-franchise-system-for-sale

The Cleaning Authority

Franchise Journal Magazine: The Cleaning Authority Sets the Standard in Residential Cleaning

cleaning-authority-franchise-journal-feature

TruBlue Home Service Ally

Build a Business That Supports Your Lifestyle Goals With TruBlue Home Service Ally Franchise

 trublue-home-service-ally-lifestyle-franchise-success

Layne's Chicken Fingers

Photo of Layne's Chicken Fingers restaurant with "Now Open" inflatable on roof

Layne’s Chicken Fingers Opening Blueprint Drives Success From Day One

franchise-opening-playbook

Right at Home

Veterans, Army, Navy, Right at Home franchisees, Veterans Day

Veterans Excel as Right at Home Franchisees: Here's Why

veterans-in-franchising-right-at-home-success

Why This Corporate McDonald’s Rep Decided To Open His Own Franchise With The Cleaning Authority

kent-lewis-franchise-success

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

houses, Why Top Franchises of 2025 Outperform Independent Businesses

Why the Top Franchises of 2025 Outperform Independent Businesses

how-franchises-outperform-independent-business-2025-tech-data

Photo of Happinest Brands teams standing together in front of branded vehicles

Happinest Brands Continues Strong 2025 Trajectory With Major Q3 Growth and Strategic Wins

happinest-brands-q3-franchise-growth

Franchise Owners Step Up To Support Communities During Government Shutdown - 1851 Franchise

Franchise Owners Step Up To Support Communities During Government Shutdown

franchise-community-support-shutdown

Slim Chickens Opens R&D Center at World Headquarters To Drive Menu Innovation

slim-chickens-rd-center-fayetteville

Nearly 40% of Americans Are Eating Out Less as High Prices Redefine Dining Habits

nearly-40-of-americans-are-eating-out-less-as-high-prices-redefine-dining-habits

NJCAR v. Ford - New Jersey Supreme Court Limits Standing Under Franchise Practices Act

New Jersey Supreme Court Limits Standing Under Franchise Practices Act

new-jersey-franchise-practices-act-njcar-v-ford

A Practical Playbook: Who To Call First When Franchising Your Business

franchising-your-business-who-to-call-first

image of jerome hanway from right at home Las Cruces, New Mexico 1851 franchise franchisee spotlight

Jerome Hanway Is Building His Right at Home Franchise Around His Mission To Serve

right-at-home-franchise-las-cruces-jerome-hanway

Photo of group of dogs standing together in day care facility

Top Pet Boarding and Day Care Franchise Opportunities for 2025

top-pet-boarding-daycare-franchises

image of franchise deep dive from 1851 franchise on doody calls franchise authority brands

DoodyCalls Franchise Costs, Fees, Profit and Data for 2025

doodycalls-franchise-deep-dive

image of michael panos and michel panos, owners of mellow mushroom in Atlanta

The Panos Family’s Role in Preserving Mellow Mushroom’s Character — and Expanding in Atlanta

mellow-mushroom-franchise-panos-restaurant-group-metro-atlanta

Tips for Preparing Your Franchise System for Sale

MORE STORIES LIKE THIS