Why It's Key for Franchisees to Have an Exit Strategy You may not realize it when you buy a franchise, but franchising is a journey. And, every journey must eventually come to an end.
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When you first buy a franchise you are filled with excitement, trepidation and all kinds of other emotions. In those early years, it's rare to think about the prospect of selling the store. Relinquishing ownership, after all, often has a negative connotation in the minds of new owners.
Why, if the franchise is successful, would one ever want to sell it? Because planning for your future is one of the main reasons to buy a franchise. And, it's terrific if you buy into a system that has a resale program already in place.
I discovered this fact through my own experience as both a franchise owner and reseller. Having an exit strategy and aligning yourself with a franchise system that has its own process to facilitate resales is instrumental for success throughout. I found it also made feel more peaceful as I built the business, knowing I was adding value year after year. I had an exit strategy and my franchisor was going to help me achieve it!
After years of owning my Signarama business in Carmel, Ind. with my wife Mary, I had achieved the kind of success that most franchisees work tirelessly to obtain. I worked hard to build a solid business and eventually increased the value of my location by 400 percent. I worked as the head of Signarama's Mentor Program, helping new franchisees acclimate and easing their transition into ownership. In short, I felt that I had accomplished exactly what I wanted to accomplish and moreover, that I was at my zenith as an owner. I thus began to long for a life as something other than a business owner, looking to sate my appetite for a new kind of challenge.
As I began to ruminate about a life with a new direction, my experiences as a mentor for Signarama started to inspire me to pursue teaching as my new focus. I found that the thing that made me most happy was teaching others to become successful business owners. As I made my own exit plans to fulfill that desire, I was comforted to find that I wouldn't have to go it alone.
I learned that United Franchise Group, the parent company for Signarama, appreciates the fact that eventually owners will eventually want to sell their stake in their franchise and so has a process for when that time comes. That the group had its own strategy to make the resale process easier helped tremendously. This, I think, was the linchpin that made selling my business as successful as it was—it's one thing that I had my own plan, but it was just as important that my plan was supported by those at headquarters.
My success is only half of the story. Franchisee peer support and transition planning—which comes from the same Mentor Program that I once headed—also greatly benefits franchisees that take over an existing franchise. Moreover, because my business was already established, the owner that took over my Signarama could rest easy knowing that the area was ripe for profit. This reciprocity between franchise seller and franchise buyer cannot be overstated.
It's important to recognize that franchise ownership is a process, a journey, which ends only when you no longer have a stake in the company. Regardless of where in the course of ownership you happen to be, understand that it's important to have an endgame strategy in mind, whether or not you have specific future plans to sell your franchise. If you're interested in buying a franchise, it's just as important to ensure that franchisor has a concrete strategy for when it becomes time to move on.