Time to Sell
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Time to Sell

Time to Sell

David Ostrowe is a longtime franchise industry veteran. He spent years on the corporate side with franchise brands like Church's and Taco Bell. Then became a franchisee where he has operated such brands as Burger King, Taco Bell, and Blaze Pizza. Today, he operates three franchise companies: Blazing Partners, 180 Business Solutions, and O&M Restaurant Group.

One of the business skills Ostrowe has developed over his career is successfully buying and selling franchise units. It takes knowledge and experience to know how to decide when to sell, what the units are worth, where the franchisor stands, and a multitude of other factors that can affect the maximization of profit when selling.

If you think selling a franchise unit may be in your future, look here for several key tips in coming issues of Multi-Unit Franchisee Report. Here's what Ostrowe says about financial statements:

Clean up your financials. No personal spending of any kind. No boats, planes, or cars. Present the buyer with clean financials that leave no doubt as to what they're buying. I reviewed another franchisee's P&L recently. The company was paying for everything. He charged every personal credit card and household expense to the business. This lowered his profitability and cut the value of his company by almost 50 percent. These financials should map directly back to your tax returns with detailed explanations on any discrepancies. Present a three-year growth and development plan. This will assist the buyer in negotiating a favorable position with the franchisor and their bank. Hold the buyer by the hand. Let them know of successes and difficulties within the organization. Share your learning and struggles. This will set up the buyer for success.

Published: December 31st, 2018

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