Exiting your franchise
This is to anyone who is thinking of exiting their franchise. You may want to exit it because you are under too much pressure, not able to spend enough time with the family, or maybe you are just not making a profit on the franchise. Some franchisees think that they are guaranteed success; however, this is not true.
When thinking about exiting a franchise, you want to make sure that you don’t make any rash decisions. If you are having some troubles with the franchise, write out the problems you are experiencing and go over them with your franchisor. Your franchisor may be able to help you come to some solutions or you may just decide that you are done. Another person you may want to talk to are other franchisees. Expressing your concerns to them may be rewarding. They may be able to give you some first-hand advice.
So after the decision making process you decide that you want to exit the franchise, review your franchise agreement to make sure you can sell your business and transfer the agreement to the next owner. You should definitely let the franchisor know because they may want to have a hand in picking the next owner. The franchisor also may want to purchase it from you, this is called “right of first refusal”. If your franchisor decides to pass on the offer, you NEED to get proof of what they said in writing. Another reason why you want to talk to your franchisor about it is because they may know of a franchisee who may want to purchase it. This is usually your best bet to get rid of the franchise quicker.
Last thing but definitely not least, you want to look over the post-term covenant in your franchise agreement to see what duties and rights you have when exiting your franchise. I would definitely recommend having your lawyer look it over so you can have a better understanding about the terms agreed to.
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