Four Steps to Help You Set Up an Exit Plan for Your Franchise Business
Setting an exit plan is usually overlooked when franchising a business. But, ideally, it is important to have one right from the start. Having an exit plan will help you drive your business in the direction that you want to take, and it will also prepare you in the event of abrupt circumstances.
So, let’s take a look at the steps on how to set up an exit plan for your franchise business.
Step 1. Know the possible reasons why an exit plan is necessary for you.
An exit doesn’t always mean a failure in the business. It can be caused by a lot of factors, and one of them can be retirement. In old age, you might want to just enjoy your time and focus on other things aside from the business.
Another reason can be migration. When you migrate, your business might no longer be accessible to you, and hence, it might be best to pass it on to someone else who can continue to run it.
Based on your long-term plans, you need to identify possible scenarios that may come your way. This will help you understand the importance of having an exit plan.
Step 2. Seek help from the experts.
You can ask your franchisor for their retirement and transition plans. This way, you can prepare all the needed documents beforehand. You may also seek help from professionals who have expertise in long-term planning for a franchise business.
Step 3. Identify possible successors.
Be it an heir, a trusted employee, or another company that might be interested in buying your franchise, you need to identify them early on. For one, an heir or an employee needs to know the ins and outs of operating the business. As for prospect companies, you must be sure that they at least share the same vision and culture that your business has, so they will be able to take over operations with the company’s best interests in mind.
Step 4. Make your business successful.
For a graceful exit, your business needs to be successful. Otherwise, no one might be willing to accept it. Run it well like you are preparing for possible surprise visits from companies who might be willing to buy your franchise.