The automotive industry, including Batteries Plus franchise stores, is expected to do well as more drivers purchase used vehicles rather than new vehicles. This creates excellent valuations for Batteries Plus franchisors. This guide offers a detailed explanation of the sales process for Batteries Plus Franchise store owners, along with insights into how to determine your value and the role of your business broker.
About The Batteries Plus Franchise
Batteries Plus franchise stores specialize in battery supply and replacement. They provide free installation services as well. As an automotive supply store, they also provide additional parts and accessories for automobiles of all types. There are approximately 640 Batteries Plus franchise stores in the United States. Similar to most of the automotive industry, Batteries Plus benefits by more drivers purchasing used vehicles.
How to Value a Batteries Plus Franchise
There are different types of valuations, including asset-based, income-based, and market-based valuations. We recommend a market approach for Batter Plus franchisors who are planning their exit strategy. This involves the use of rule of thumb data (acquisition multiples) and your seller’s discretionary earnings. Here is the most up-to-date rule of thumb data for Batteries Plus franchises:
- Batteries Plus stores sold between 2.73 and 3.28 times the Seller’s Discretionary Earnings (SDE)
- Batteries Plus stores sold between 3.10 and 4.34 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Batteries Plus stores sold between 0.40 and 0.53 times the annual net sales
Your broker should also consider additional valuation factors, including non-financial factors such as your store’s reputation, location, growth potential, and your reason for selling.
You should also check: How to Sell an Auto Repair Service Center
The Sales Process for Batteries Plus Franchise Store
It helps to understand the sale process before you begin. From reviewing your franchise agreement and determining your Battery Plus store’s worth on the market to ensuring a successful and stress-free closing experience, your broker assists you throughout the process as well. Here are the six steps to selling a Batteries Plus Franchise store.
- Franchise agreement review
- Business valuation
- Marketing approach
- Negotiations and LOI
- Due diligence map
- Purchase agreement (closing)
Below is an in-depth review of the sale process, providing insights into what you will need to do during each step and how your broker helps with the process.
1. Franchise Agreement Review
Your franchise agreement with Batteries Plus likely includes terms and conditions related to the sale of your store. You will first need to understand the terms of your Batteries Plus franchise agreement, specifically as it relates to selling. You will also need to notify Batteries Plus before you seek a buyer. They can provide you with more information on the qualifications the buyer must possess. Your broker and attorney can also assist you with this stage as well.
2. Business Valuation
Your business valuation helps you determine the market value for your store. This is essentially the purchase amount that is considered fair, and it is approximately how much you can expect to sell your store on the market. In some cases, you may sell for above fair market value. Regardless, it is important to first receive a professional business valuation as it helps with the negotiation stages.
3. Marketing Approach
Your broker will personalize your marketing approach according to what works best for your restaurant. The buyer must be approved by the Batteries Plus franchise, so the search for a buyer is a little more limited in scope. Additionally, your broker should maintain confidentiality as news of a potential sale could cause complications with the sale process, including affecting your valuation and the subsequent offers you receive.
4. Negotiations and LOI
Your broker should also assist with negotiations and contingencies. You are able to be as active in this process as you desire as well, ensuring you find the buyer that best allows you to reach your goals for the sale. This process ends with a signed letter of intent, or LOI, from a qualified buyer. As mentioned, Batteries Plus will need to provide final approval for the buyer and proposed terms.
5. Due Diligence Map
We recommend using a due diligence map that outlines the stages involved with due diligence and a timeline for each stage of the process. This helps ensure the process moves quickly and allows the buyer the opportunity to receive and review all information they need to feel comfortable to proceed with the purchase. Notably, due diligence may include a review of your financial and legal documents, a visit to your store, discussions with the Batteries Plus franchise, and meetings with business partners and employees.
6. Purchase Agreement (Closing)
You are almost there once due diligence is complete. However, the work is not yet done. The closing table is often a tense environment filled with attorneys who are reviewing documents and ensuring all look good for their clients. Your broker may attend if necessary as well to ensure all goes smoothly. Ultimately, you will attain the final signatures of the purchase agreement, confirm the payment has been sent, notify Batteries Plus that the sale is complete, and transfer ownership of the store to the buyer.
Speak With a Professional Business Broker Today
Here a Sigma Mergers and Acquisitions, we understand the process for selling a Batteries Plus franchise. We have helped hundreds of businesses sell, and we look forward to assisting you with your sale as well. To learn more about our brokerage and consultancy services and receive a free valuation, schedule a consultation with us.
Scot Cockroft is the Owner & President of the #1 ranked Business Brokerage, Business sales and M&A firm in Texas. Scot has been named Named Deal Maker of the Year by Dallas Business Journal.
He is committed to a “different” type of business brokerage firm, one that is NOT about a sales pitch but, rather, results! In short, a business brokerage firm that is committed to performance-based compensation. Scot believes in these principles as well as a candid honesty with clients. His candid style often takes buyers and sellers by surprise, but is often what assures successful connections between the two.
Feel free to reach out!