Is Now the Right Time to Sell Your Franchise to a Private Equity Firm?

In this article published by Entrepreneur, iFranchise Group CEO and experienced franchise consultant Mark Siebert discusses the flurry of activity occurring in the marketplace, where private equity (PE) firms and others buying franchise companies at a record pace. He advises that for franchise companies where a sale of the company is a part of their future plans, now may be an ideal time to consider taking that step.

However, Siebert cautions that the timing has to be right from the standpoint of the franchise company’s readiness and business valuation, and he discusses the research and preparation that should be done, as well as resources franchisors can use, before and during the process of an acquisition.

In the article, Siebert also discussed the advantages that private equity firms and multi-brand platform companies can bring to the table, as well as the downsides a franchisor should consider. He also reviews what a PE company will look for, both operational and financial, from a franchisor as part of their own due diligence processes.

In the end, the decision to align with a private equity company is not a quick one, and it will be important to ensure that there is a good financial and cultural fit on all sides of the equation.