Selling a franchise business is not as straight forward as selling your own business. Your franchise agreement will have detailed instructions on the procedures that you need to follow when you take the opportunity to sell your business.
The franchisor will be able to assist you in valuing your business and look for buyer in Malaysia will probably insist that you use the methods of valuation as set out in the franchise agreement. You will of course be free to seek independent advice and valuations.
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Be careful when seeking the advice of experts and always agree on the price beforehand so that you are prepared for the final costs and have a chance to negotiate any prices quoted before giving them the work.
It is always worth seeking a second opinion as valuations can vary wildly. This is due to the many variables the valuation experts take into account including future growth potential of your business and values for any properties whether leased or purchased.
Acceptable Business
The franchisor usually has a right to buy your franchise business for sales at the same price as the highest offer received and considered acceptable. This is a normal part of any franchise agreement and is there to protect the rights of the franchisor. If they believe that you are selling the business at undervalue, then they could take the opportunity to step in and buy the business for the same price.
Most franchisors will be able to assist you in the sale of your business if required. This service usually demands a premium and or a higher percentage of the purchase price. Finally bear in mind that there is always a difference between the valuation and the final price achieved. In some cases, this difference can be huge. In the end, the market place will decide what your business is worth and not the valuation report.
Verdict
At any point in time, some businesses are more in demand than others and can command prices well in excess of their valuation price. Taking all this into account it is better to sell the business when the economy is doing well or on the right side of the economic cycle. By getting the timing right, this can make a huge difference to the sales price achieved.