Preparing Your Business For Transition 1
Dec 16, 2015
Preparing Your Business For Transition1
Topics for Session The Importance of Planning Your Exit
Strategy in Advance Set the Right Expectations when
Planning to Sell Your Business Implementing Your Exit Strategy Understanding the Sales Process Understanding the Transfer Provisions
and Transfer Documents Transitioning your TAB Business Resources
EXIT STRATEGY
The Importance of Planning Your Exit Strategy in Advance
Impacts your business plan Impacts what you do next and your personal
vision Allows you to manage your business to your
exit plan and make adjustments when necessary
Proactive v. reactive Allows you to build your business in the ideal
shape for your exit option Allows you to groom successors if coming from
within the business Allows you to choose when you exit
Set the Right Expectations when Planning to Sell Your Business
Purchase price Determining the value of your TAB
Business from your perspective Determining the value of your TAB
Business from your buyer’s perspective Timing
The structure of a deal can impact timing
How long does it really take to sell
Industry Statistics for Selling a Business
Key Points of Exit Strategy Planning
Plan well in advance - value is optimized when you are proactive rather than reactive
Align your day to day operations with your exit plan
To optimize purchase price, know what your ideal buyer values and build that value
Be realistic on timing- over 80% of all businesses take 9 months to 2 years to sell
Implementing Your Exit Strategy
Step One – Evaluate your TAB Business Is your financial house in order?Measure key metrics and performance
indicators and know how to communicate your KPIs to a buyer
Is it all about you?What is your Net Promoter score?Are you effectively using all the assets
available to you?
Implementing Your Exit Strategy
Step Two – Prepare your TAB Business for sale Improve areas of weakness Continue to focus on the day to day
operations
Implementing Your Exit Strategy
Step Three – Communication With TAB
([email protected]) With TAB Members (be careful here)
Timing Transition Plan
Key Points to Exit Strategy
Assess your TAB Business early so you have time to shore up your strengths and address the weaknesses
Integrate the TAB tools into your business operations
Stay focused on the daily operations of your business
Utilize the Business Navigator Communicate with TAB If your business is underperforming, consider
competitive pricing and terms11
THE SALES PROCESS
Understanding the Sales Process
Locating a prospective buyer The inside sale
Partners and Contract Facilitators Fellow Facilitators
Third party buyers Your network Broker networks
Types of Sales
Traditional sale Partner model Contract Facilitator model
Understanding the Sales Process
Introducing a buyer to the TAB Business and TAB System The current model The TAB sales process
Qualifying the buyer Franchise Disclosure Document Questions on the franchise agreement Waiting periods under the FTC Rule
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Understanding the Sales Process
The TAB sales process (continued) Attending a TAB Board meeting Discovery Day Validation Territory considerations
Understanding the Sales Process
Available Support TAB’s enhanced re-sale support Area Developer support
Understanding the Sales Process
Preparing your business for due diligence Be organized Have a confidentiality agreement in place first
Key Points of The Sales Process
Know the system that the buyer is joining Review the Value from TAB spreadsheet The buyer must meet TAB’s current
qualifications Communicate with TAB to facilitate a smooth
transition through the TAB sales process Respect your fellow franchisees when
commencing the validation process TAB’s enhanced support is available to assist
you through the process
TRANSFER PROVISIONS AND DOCUMENTATION
Transitioning your TAB Business
Transition plan Learning and introductory phase The mentoring phase Passing the torch phase
Survival provisions in your franchise agreement
Understanding the Transfer Provisions in Your Agreement
Compliance TAB’s consent Buyer qualifications TAB’s right of first refusal
The Transfer Documentation
Three agreements Buy sell agreement New franchise agreement Transfer and termination agreement
The closing
Payments Payments to you
Purchase price Receivables
Payments from you to TAB Required fees (i.e. transfer fee) Optional fees (i.e. re-sale assistance
fee, broker fees) Payments from your buyer to TAB
Training fee Marketing fee
Key Points for Transfer Provisions and Documentation
Well organized due diligence process can help you counter any buyer skepticism
Have a confidentiality agreement in place before disclosing your business information
Your buyer will not be assuming your franchise agreement and only TAB can negotiate the terms of the new franchise agreement
Your closing will be subject to the 14 day and 7 day rule under the FTC rule
The purchase price is paid to you
Resources
Take advantage of the re-sale support Resale Manual
This document is located on the intranet in the Library under Running Your TAB Business and the folder titled Exit Support
Re-sale Team can be reached at [email protected]
Area Developers
Questions?