Selling our business - HELP!

[the.jordathan]

Almost four years ago, my wife and I bought a franchise that had almost nothing going for it. Now, it's doing well with lots more room for growth, but it's now getting in the way of her being a mommy and so we've made the family decision to sell the franchise.

The problem is that this is not a well-known business and it can be very difficult to find people outside of the company interested in buying. We have one franchise owner in the company willing to buy, but it's for way less than what we want to sell it for. She's basing her offer on the fact that our territory is still somewhat small and isn't accounting for how much it's grown or the fact that it's located in the #2 fastest growing city in the US, meaning that there will be a lot more growth in the near future.

As much as we would like to find other buyers who might be willing to pay more the amount we think is fair, we have no idea how to go about that right now as nothing else has worked over the past couple of months and this is the only offer that we've gotten. Time is of the essence for us and we want it sold by year's end.

Any advice out there?

[Freelancier]

Find a business broker to help you sell it.

[the.jordathan]

Thanks for the input - I've already reached out to a couple.

[Fulcrum]

You cannot factor in future growth into your asking price. You might be able to get a few extra bucks for it but it won't be a major portion of your asking price.

[huggytree]

i also dont think you can charge extra for unknown future growth....ive learned that from watching Shark Tank....people value their business at 2,000,000 and have only $100,000 or less in sales...always based on future growth

sell it for what its worth today

[Paul]

May I ask what the business is? Retail, wholesale, service? Is there competition with similar franchises or independent businesses? Is it particularly unique or proprietary?

There is the possibility for a premium on growth potential for some business, BUT it has to be a very convincing situation. Realistically, a franchise in a defined territory usually has a calculable growth trajectory and a predictable limit for growth.

[Freelancier]

Yes, you can sell future growth under certain circumstances, the most common of which is that you have some very useful patents that another company wants. Intellectual property has a potential future growth that many companies will pay for. However, for something that's not patented, unless you have another high barrier to entry (patents provide a very high barrier to entry for any competitor), you're more likely just selling assets and/or current cash flow.