Why It's Key for Franchisees to Have an Exit Strategyby Joel Hall
When you first buy a franchise you are filled with excitement, trepidation and all kinds of other emotions. In those early years, it's rare to think about the prospect of selling the store. Relinquishing ownership, after all, often has a negative connotation in the minds of new owners.
Why, if the franchise is successful, would one ever want to sell it? Because planning for your future is one of the main reasons to buy a franchise. And, it’s terrific if you buy into a system that has a resale program already in place.
I discovered this fact through my own experience as both a franchise owner and reseller. Having an exit strategy and aligning yourself with a franchise system that has its own process to facilitate resales is instrumental for success throughout. I found it also made feel more peaceful as I built the business, knowing I was adding value year after year. I had an exit strategy and my franchisor was going to help me achieve it!
After years of owning my Signarama business in Carmel, Ind. with my wife Mary, I had achieved the kind of success that most franchisees work tirelessly to obtain. I worked hard to build a solid business and eventually increased the value of my location by 400 percent. I worked as the head of Signarama’s Mentor Program, helping new franchisees acclimate and easing their transition into ownership. In short, I felt that I had accomplished exactly what I wanted to accomplish and moreover, that I was at my zenith as an owner. I thus began to long for a life as something other than a business owner, looking to sate my appetite for a new kind of challenge.
As I began to ruminate about a life with a new direction, my experiences as a mentor for Signarama started to inspire me to pursue teaching as my new focus. I found that the thing that made me most happy was teaching others to become successful business owners. As I made my own exit plans to fulfill that desire, I was comforted to find that I wouldn’t have to go it alone.
I learned that United Franchise Group, the parent company for Signarama, appreciates the fact that eventually owners will eventually want to sell their stake in their franchise and so has a process for when that time comes. That the group had its own strategy to make the resale process easier helped tremendously. This, I think, was the linchpin that made selling my business as successful as it was—it’s one thing that I had my own plan, but it was just as important that my plan was supported by those at headquarters.
My success is only half of the story. Franchisee peer support and transition planning—which comes from the same Mentor Program that I once headed—also greatly benefits franchisees that take over an existing franchise. Moreover, because my business was already established, the owner that took over my Signarama could rest easy knowing that the area was ripe for profit. This reciprocity between franchise seller and franchise buyer cannot be overstated.
It’s important to recognize that franchise ownership is a process, a journey, which ends only when you no longer have a stake in the company. Regardless of where in the course of ownership you happen to be, understand that it’s important to have an endgame strategy in mind, whether or not you have specific future plans to sell your franchise. If you’re interested in buying a franchise, it’s just as important to ensure that franchisor has a concrete strategy for when it becomes time to move on.
For 14 years, Joel Hall owned a successful Signarama business in Carmel, Ind., during which time he was head of Signarama’s franchisee Mentor Program. Joel is now an assistant professor of Marketing at Marian University in Indianapolis.
Tommy & Dolores Green Explore New Post-60 Career With Signarama
Tooba Marwat is the owner of Signarama in Plano, Texas and is the mother of three boys. She plans on utilizing all the skills she has learned while raising her family and channeling them into her new business. One of her highest priorities is creating jobs for Plano residents.
How has your life experiences made you the leader you are today?
I came to the US from Pakistan when I was 20. I came from a well-to-do family of lawyers in Pakistan. My husband, Saleem Marwat, is an engineer at a high-tech firm, Texas Instruments. I was a computer science major in college but couldn't finish my degree once I had children. I always had the ambition to have a professional career. Now that all my kids are going to school, my husband and I decided that this was the right time to own a business. We purchased an existing franchise, Signarama, in Plano.
How has your previous employment/roles aided your position at Signarama?
It may not appear to be an easy transition from a full-time Mom to a full-time franchisee and small business owner. Believe it or not, nurturing and taking care of a family gets you ready to face tough challenges in life. So far, I've found a lot in common with running a business and running a house with 3 kids. It has the same challenges such as multi-tasking, following a schedule, taking care of people (employees or kids), etc.
What have been the highlights and challenges during your time at Signarama?
The main challenge has been to balance the business revenue growth with headcount increase. I see a great potential in the Plano market but I don't want to increase headcount uncontrollably causing cash flow problems for me in the short term.
What advice can you offer to women who want to own a franchise?
Simply put, 'Just Do It'. My husband, Saleem, and I talked about business ownership for a long time, but at the end of day, we had to put the pen to paper and sign a deal. We haven't looked back.
How do you maintain a work/life balance?
To be honest, it's not easy. I decided to purchase a franchise that has normal business hours, Monday through Friday, 8:30 AM to 5 PM. I've made it clear that my kids' education is a top priority. With help from my husband, I've been able to manage a good work/life balance.
What do you think is the biggest issue for women in the workplace?
The biggest issue for women is balancing work/life balance. Business ownership is a full-time commitment and so is raising a family. I've to be disciplined with my time in order to fulfill both responsibilities well.
How has mentorship made a difference in your professional and personal life?
My mentor is my husband, Saleem, who has 17 years of corporate experience and encouraged me all the way that I could do it. Roger Robinson of Signarama-Dallas has been a great mentor in this business. I spent a week at his store to see how a successful franchise is run.
Which other female leaders do you admire and why?
I greatly admire Benazir Bhutto from Pakistan. Benazir Bhutto was twice elected as Prime Minister of Pakistan and later assassinated by the Taliban. Although I didn't agree with the politics of Benazir Bhutto, I admire her tenacity and leadership to rise to the top in a country where women have few rights.
What do you want Signarama-Plano to accomplish in the next year?
My goal is to double the revenue of Signarama-Plano in the next year while adding two new employees to the team.
Rich & Sonja Heaton
Boston.com and many other online portals covered a story about Signarama Orangeburg, SC franchisees Rich and Sonja Heaton. Here is an excerpt, talking about successful strategies for buying and selling franchises:
ORANGEBURG, SC – 09 Oct, 2015 – When you buy a franchise you are not necessarily thinking of an exit strategy or how you’re going to sell the business in 10 or 15 years. But in the case of Sonja and Rich Heaton, it was exactly what was on their minds. And they can share some lessons about planning for just such an event.
After years of owning a Signarama in Orangeburg, SC, Rich and Sonja Heaton started actively positioning their business to sell. It took most of the next decade for the couple to build the business to where they wanted it to be to achieve a maximum return of investment and complete the sale.
“We went into the business knowing one day we would sell and started preparing and understanding the process about five years into the business,” said Sonja Heaton. Even though they had it all planned, when they finally got to the selling point, the process still took nine months.
Before buying their Signarama franchise, the Heatons had spent five years running another franchise. They also worked for a jewelry firm for five years and Rich was a petroleum executive for seven years at a company that he played a pivotal role in selling.
Sonja Heaton says these experiences taught them the importance of customer service. A lesson they took with them to their Signarama store.
“Sign companies in general have a bad reputation of slow turn around and customer service,” said Rich. “We made sure we provided our services in a timely manner. We practiced the cliché, ‘the customer is always right’, and put it into practice by refusing to say “No” to any project. We would take rush projects that many other companies would turn away. We provided solutions to problems no one else had the solution to.”
That can-do attitude helped their business succeed by creating a loyal customer base.
“We specialized in small- to mid-sized chain accounts,” said the Heatons. “These smaller businesses needed the service that the larger companies like McDonald’s were getting, but they weren’t able to get them because other signage companies didn’t think they were big enough.”
Now that they’ve finished the process of selling their successful franchise, the Heatons are looking forward to moving to Charleston, SC, but they’re far from thinking about retirement.
“We have started a consulting business to help people build their businesses as we did,” said the Heatons. “We are now helping people with their exit strategies and preparing them to get to a point where their business is ready to sell.”