We are often contacted by clients with an interest in selling all or a significant portion of their company. These franchisors share a number of reasons for selling: ranging from the opportunity to earn a significant return on the transaction to personal reasons. Whatever the reason, selling a franchise company can present more challenges compared to selling a non-franchised company. Although a franchise company presents the potential buyer a contractually committed network of franchisees, this perceived advantage can easily become a disadvantage. There is no doubt that a buyer, that will acquire franchise agreements and the franchisor obligations will conduct a vigorous due diligence.

In addition to the routine steps companies should take when preparing to sell their business, a franchisor needs to go above and beyond these procedures. If you're an existing franchisor considering the sale of your company, now or in the immediate future, here are some items to consider:

• Make sure there are no significant franchise relations problems. The easiest way to scare off a potential buyer is to have a group of disgruntled franchisees. Take the necessary steps to identify and correct franchise relation problems before listing the business for sale.
• Address any outstanding franchise disputes before they escalate. The last thing a buyer wants to inherit is a franchisor with a number of franchisees with unresolved problems, be they financial or territorial in nature.
• Be sure that all of the franchise files, to include agreements and documentation, are complete and in good order. A sure fire way to lose a buyer or face the prospect of responding to a reduced purchase price is to have poor or incomplete franchise files.
• Any open litigation should be resolved where possible. Obviously timing is key, however, If there is a strategy to sell within the year then cleaning up open litigation (if possible) should be done.
• Have financial statistics pertaining to franchise operations. Although franchisor income statements and the balance sheet are key documents, most buyers would want to see metrics regarding franchise sales, gross margins, sales trends,etc. If you don't have a vehicle for gathering this information, be sure to implement a system, ASAP.
• Review franchise agreements for expiration dates. Its better to deal with short term franchise agreements now rather than having a buyer find out that a large number of franchise agreements will expire in the very near future. Franchise agreements with a short term present an opportunity to encourage extensions for good performers and an exit strategy for those franchisees who may be struggling.

Although due diligence will be conducted by buyers, the scope of due diligence will increase based upon the size of the transaction. There are other items to consider, however, the preceding are among the most important. The purchase price of a franchise company is based in great part upon the value of the franchise network. That franchise network and its franchisees, which operate under franchise agreements can be expected to undergo a good deal of scrutiny. As a final point, any buyer must be considered in terms of avoiding possible conflicts with the franchise network.

" You can't expect people to see eye to eye with you if you're looking down on them." Anonymous

Here are the top 10 business best sellers from the New York Times.

1. Why We Want You To Be Rich by Donald Trump, Robert T. Kiyoski, Meredith McIver and Sharon Lechter. Money making lessons from moneymakers.
2. The World Is Flat by Thomas Friedman. Globalization trends in the 21st century in economics and foreign policy.
3. War On The Middle Class by Lou Dobbs. The CNN anchor of "Lou Dobbs Tonight" decries outsourcing jobs, decline in healthcare standards and the widening income gap.
4. The Blind Side by Michael Lewis. The evolving business of football, viewed through the eyes of left tackle Michael Oliver.
5. Freakonomics by Steven D. Levitt and Stephen J. Dubner. A scholar uses economics to explore the incentives that drive disparate groups that include,sumo wrestlers and schoolteachers.o
6. Tough Choices by Carly Fiorina. A memoir of Fiorina's six years as CEO of HP until she was forced out by the Board of Directors.
7. Truth Or Delusion by Ivan R. Misner, Mike Macedonio and Mike Garrison. Facts and fiction about referral marketing.
8. Now Discover Your Strenghts by Marcus Buckingham and Donald O. Clifton. How to discover your talents and those of your employees.
9. The Five Dysfunctions Of A Team by Patrick M. Lencioni. A fable that illustrates how teamwork can be restored to even the most troubled and entrenched workplace.
10. Who Moved My Cheese? by Spence Johnson. A management expert offers techniques for dealing with workplace change.

Some suggested books for holiday gifts:

• Tunney; Boxing's Brainiest Champ and His Upset of Jack Dempsey by Jack Cavanaugh
• Mayflower: A Story of Courage, Community and War by Nathaniel Philbrick
• Miracle on 49th Street by Mike Lupica
• The Collectors by David Baldacci
• Sea of Thunder: Four Great Commanders and the Last Great Naval Campaign 1941-1945 by Evan Thomas

FranchiseKnowHow conducted a recent survey of franchisors. The focus of the survey was on franchisor leads generated from franchisor websites and some related areas. We think you'll find the results interesting.

Following are some of the key survey results:

• 80% of franchisors reported receiving 25-50 leads per month from their own website.
• 33% of franchisors said that they actively promote their own website.
• All of the respondents reported advertising on at least one Internet Advertising site.
• 66% of the franchisors claimed that the quality of leads from their own website were better than the leads from the Internet Ad sites. The remaining group said the leads from their sites were comparable in quality to the Internet Ad sites.
• 60% of the franchisors reported that they used a combination of in-house franchise sales people and franchise brokers to sell franchises.
• 50% of respondents claimed that it takes from 85-100 total leads to sell one franchise.

The Conclusion:

Most franchisors do very little to promote their own websites, despite the fact that the leads from their own sites may be of higher quality.

Recommendation:

Franchisors should do more to drive traffic to their own website.

Franchisors who wish to participate in future FKH surveys can simply drop an e-mail to ed@franchiseknowhow.com

"To succeed you need to find something to hold on to, something to motivate you and something to inspire you." Tony Dorsett

As a reminder to our readers, FranchiseKnowHow provides a variety of services.

These services include:

• Franchising an existing business or concept
• Operational and marketing assistance for start-up franchisors
• Franchise relations and operational audits
• International franchise development strategies
• Franchise documentation and IP services
• Preparing franchisors for the sale of their company

For additional information contact FranchiseKnowHow.

" When experience matters."