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Why Selling Your Brand Could Be The Smartest Thing You Ever Did
Sometimes it's good to say goodbye, especially in the franchise industry.
It seems as if there is a sudden influx of private equity deals happening in and around franchising these days. Everything seems like it is potential bait for being gobbled up. This is a good sign, in that it showcases the economy is finally back (wait, hasn’t that been a headline for months now?). It also means that franchisors and suppliers alike should think about what a sale would mean for their company.
I remember back in 2007, I was talking with a franchise consultant about a potential acquisition of a brand. She said something to the extent that the contracts were a mess, the files were disastrous, that all that was left for purchase was a really good idea and a lot of chaos. This stuck with me. As I worked tirelessly, I have tried to be diligent with all contracts and paperwork in case we ever needed an exit strategy. I also recruited possibly the best CPA in the world (my wife). You never know when an exit may come, yet you know it is inevitable – why not do things right from the start?
I think about what life would be like if I moved away from my brand – No Limit Agency*. Could a bigger agency take our model and improve it? Perhaps. Would it be worth it for me to sell the company today? Probably not, as I think there is still a lot of steam in the engine.
I was watching a TV segment featuring the founder of Smoke’s Poutine. He said something about having a lot of energy to still grow at his pace, so why sell? Perhaps that is the point entrepreneurs need to circle on their brand’s life cycle – the day the steam runs out.
I also think about strapped for cash start-ups. What is the value of them partnering? Access to dollars and knowledge, perhaps. Is owning 100 percent of a small brand better than owning 30 percent of a giant brand? Can the founder move enough out of the way to let the new group see what happens when they get their hands dirty?
I have seen firsthand some great concepts turn into great brands through a successful partnership. I have also seen many buy into the tall tales of partners and fall down a hole that ultimately sunk their idea. No matter what you decide when selling 100 percent or 10 percent, it will always be a crapshoot. There are no guarantees in partnership, just as there are no guarantees in life.
So, could selling your brand be the smartest thing you ever did? I think that will depend on whether you have gas left in the tank, if the new group really has the horsepower to win and if your concept truly has legs to be legendary.
As No Limit Agency moves into the future, who knows what will happen? For now, I have a lot of gas (no need to cover your nose). Selling is not right for me yet. But if I were to ever become a liability for the potential success of my company, adjustments would have to be made. For now, I think we will look to partner or acquire other agencies on a similar mission. We will be the buyers for now.
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About the Author
Nick Powills
FollowNick Powills, CFE, founded No Limit Agency in 2008 and serves as Chief Brand Strategist for the Chicago-based firm. No Limit is a full-service communications agency that establishes and elevates brands by bridging Public Relations, Social Media, Marketing, Advertising, Digital, and a lot of creativity, to best strategize well-rounded and successful campaigns for 50+ global franchise brands. By presenting visionary ideas and building real relationships, No Limit is able to create effective media branding strategies to help companies grow. Nick currently leads a staff of writers, media strategists, designers, social media experts and digital producers in an office think-tank where brands are humanized for strong, compelling media stories. Prior to starting No Limit at the age of 27, Nick spent four years working at a franchise PR agency where he mastered the art of building rapport with media outlets and creating newsworthy pitches for earned media placements. He holds a Bachelor of Journalism from Drake University in Iowa.
