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Franchising: A New Way To Sell Your Business

Franchising is a new approach for selling mid-size businesses that may otherwise be hard to finance in a traditional sale. Franchising in these situations allows each of the locations of the business to be sold as an independent business and to get financing on a piece by piece basis. Franchising your business in these situations can be very beneficial and help combat the biggest hurdle to the sale of many businesses. You can also franchise your business via

Benefits to turning your business into a franchise system to sell out:

1. Increases the worth of the business: If you've built your business for years selling out is cashing out but at what multiple. Earnings multiples on businesses are generally low accounting for the risk. Franchising may dramatically increase the value of the business.

2. Spread the risk: Franchising in pieces increases the investor pool that would be putting in their own money and equity.

3. Financing: Getting financing for the sale of the company can be difficult in those situations achieving multiple smaller small business loans through the government-guaranteed loan programs is sometimes the only method to fully cash out without carrying back loans to a new buyer.

4. Ongoing income: By franchising the business you are gaining an ongoing source of revenue. Alternately if the end goal is to completely sell out, selling the franchise system will yield extra revenue.

5. Continuation of your business: It's hard to give up something you have built, by franchising you do not have to give up your identity that had developed out of the business if you choose to stay operating the system while selling off pieces as franchises.