Multi-Unit Franchising Exit Strategies Articles

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Is There a Merger in Your Future?: Why Mergers Could Become A Hot Strategy This Year

JAN. 25, 2010 08:00:00 AM | BY DEAN ZUCCARELLO

Mergers and acquisitions (M&A) have been an instrumental component in franchising over the past two decades, particularly as a growth vehicle for expanding companies. Historically, most transactions in franchising have concentrated more on the "A" than on the "M." Some of the primary drivers for this have been cultural and business trends deeply entrenched within franchising. However, the current global financial crisis and franchising's own changing dynamics may alter this.

Restaurants Face New Reality: Operating in a Changed Economic Environment

NOV. 23, 2009 08:00:00 AM | BY DEAN ZUCCARELLO

Since mid-2008, the economy, consumers, and the restaurant industry have been in the vice grip of the country's deepest and longest recession since the Great Depression. Finally, a light at the end of the tunnel is beginning to emerge. Most economists are now saying we have reached or passed the bottom. While the going is certainly still rough, business conditions are beginning to improve, unemployment is stabilizing, and consumers are dipping their toes back in the spending pool. Capital flow is increasing, with equity investors coming off the sidelines and lenders beginning to seriously pursue new debt facilities for borrowers.

How To Sustain Your Business Growth So You Can Exit Successfully

NOV. 03, 2009 12:00:00 PM | BY NICHOLAS K. NIEMANN AND ANDREW HOROWITZ

Robert came to us to help him develop a 5-year Transition Growth Plan so he could sell his company and retire. He had high expectations for what the sale would net him financially, based on his presumed growth rate. Unfortunately, his presumptions were well beyond business reality. He had never utilized a written strategic growth plan or a business model innovation program. And the stagnant state of affairs which made up his company were proof of this.

Managing Your Personal Wealth

OCT. 02, 2009 08:00:00 AM | BY NICHOLAS K. NIEMANN AND ANDREW HOROWITZ

Jake was visibly upset when he came to see us. He had been planning to retire in 3 years by age 55, based on the combined value of his personal investments and his company. This was now on hold for an indefinite period of time. Like many, he had suffered a significant hit in the 2008 through 2009 stock market declines. He wanted to visit about the benefits of a comprehensive wealth plan - something he hadn't taken the time to explore in the past.

Trend Spotting: What Lies Ahead in the New Financing Landscape?

SEP. 08, 2009 08:00:00 AM | BY DEAN ZUCCARELLO

The historical consolidation of franchise finance sources (local and regional banks, and other institutions) has led to only a handful of major players financing franchised companies over the last several years. These institutions, all well-known household names, have dramatically decreased leverage multiples while increasing interest rates and, most importantly, are tightly preserving capital until general economic conditions show signs of stability. As these lenders limit the flow of debt capital to franchising (or shut off lending completely), there are some trends all franchise owners should consider to ensure their financing needs are met during this recession.

Avoiding Co-Owner Disputes So You Can Transition Successfully

SEP. 01, 2009 10:00:00 AM | BY NICHOLAS K. NIEMANN AND ANDREW HOROWITZ, CPHD

Sam and Louie had been in business for about ten years, operating a chain of retail clothing stores. They were 50/50 owners in the corporation. When Sam approached us he had already been working for about 9 months to try to come up with a proposal which Louie would accept for dividing up their operations.

Protecting Your Company's Intellectual Property Is Another Key To Your Successful Transition

JUL. 29, 2009 12:00:00 PM | BY ANDREW D. HOROWITZ, CPHD, AND NICHOLAS K. NIEMANN, ESQ.

Craig had a sales organization which he had built but had just recently suffered a serious setback when he came to us to talk about his Transition Growth Planning. He had helped develop three key employees whom he felt were primed and ready to eventually take over and purchase the business from him. Unfortunately, he had not yet communicated his vision for these employees to the employees themselves. Shortly before he met with us, these three key employees decided that their best future would be to develop a new business on their own. So they left Craig and took their book of business with them. Much of this business had been initially developed by Craig, who had been transitioning his contacts over to these three individuals.

A Business Owner Estate Plan Is Key To A Successful Transition

JUL. 02, 2009 12:00:00 PM | BY ANDREW D. HOROWITZ, CPHD, AND NICHOLAS K. NIEMANN, ESQ.

Sam had developed and owned a successful retail operation during his business career. He also tried to be diligent by having what he thought was a sound estate plan executed before he died. He and his wife Sally felt they had everything taken care of. So when Sam died unexpectedly, Sally was dismayed to see the vehement dispute that developed between her two sons as to who would operate the company going forward. Apparently Sam had spoken to both of them about running the company if something happened to him, but he had failed to make this decision. Sally ultimately found her only choice to resolve the dispute was to just sell the business.

Understanding Cash Flow Impact On Your Company's Value

MAY. 29, 2009 08:00:00 AM | BY ANDREW D. HOROWITZ, CPHD, AND NICHOLAS K. NIEMANN, ESQ.

John had come to us with high expectations for the price he thought his company would sell for. He was certain of this because he had seen other companies sell for a similar multiple of gross revenue. However, what John had failed to understand was that buyers are only partly interested in top line revenue. More important to negotiating the selling price of most companies is the net cash flow the company produces. John's bottom line failed to live up to industry standards, which meant he wasn't likely to achieve the exit he had envisioned.

Coordinating Your Succession and Exit Blueprint

MAY. 04, 2009 08:00:00 AM | BY ANDREW D. HOROWITZ, CPHD, AND NICHOLAS K. NIEMANN, ESQ.

We weren't surprised by our meeting with Art. We had seen it many times before. Art and his son had founded and built a very successful retail business. They had operations across the country which were consistently producing significant year-to-year net cash flow. Art had decided recently that he was ready to sell the company and that he wanted to get this done right away.

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