Join our Waitlist for Expert Advice!

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.

By Joel Hall

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock

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!

Related: How These Three Stay-at-Home Moms Teamed Up to Buy a Franchise

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.

Related: Franchise Players: How This Entrepreneur From a Franchising Family Chose to Open Her Own Signarama

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.

Related: Does the Franchise Industry Have a Turnover Problem?

Joel Hall

Assistant Professor of Marketing at Marian University in Indianapolis

For 14 years, Joel Hall owned a successful Signarama business in Carmel, Ind., during which time he was head of Signarama’s franchisee Mentor Program. Joel is now an assistant professor of Marketing at Marian University in Indianapolis. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Starting a Business

She Started a Business With $300 After Getting Laid Off. It Made $300,000 in Year 1 and Became a Multimillion-Dollar Company.

Bobbie Racette wanted to revamp the virtual assistance space — and provide job opportunities for underrepresented communities at the same time.

Side Hustle

This 79-Year-Old Retiree's Side Hustle Earns $4,000 a Month: 'I Work as Much or as Little as I Desire'

Dan Weiss saw an article about a side hustle in the local newspaper — then decided to try it himself.

Science & Technology

These Are the 9 Dead Giveaways That AI Wrote This Story

How to spot a bot behind the content you read—everytime.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Money & Finance

These 3 Money Mistakes Derailed My Financial Stability as a Latina Entrepreneur — Here's How You Can Avoid Them

These are common hurdles for Hispanic entrepreneurs, but with the right strategies, you can overcome them and achieve lasting financial stability while staying true to who you are. Here's how to avoid the three biggest mistakes that could be holding you back.