Why You Shouldn’t Buy a $400,000 Ferrari Before Your Business Sale Closes

A fitness business franchisee of a national franchised fitness center accepted an offer from a qualified buyer. While excited to be stepping away from his business as he had other business opportunities he wanted to pursue, he made an interesting terrible decision before the business sale closed escrow.

A buyer for a 19-unit fitness business hired a firm that specializes in performing due diligence for buyers and invested over $100,000 with this firm. Normally, when a buyer invests this much money into doing due diligence in a transaction, they are generally very committed to seeing the transaction through to closing. Things turned out quite differently.

Some franchisees of national brands such as McDonalds often acquire other franchised brands due to a secret of having a multi-brand strategy.

Why franchisors often are unable to help their franchisee partners exit their business and why franchisees are often better off finding an expert to help them sell their business vs. the franchisor.

Jon Franz
Franchise Clearly
Winter Park, Florida
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