Are you a Blimpie franchise owner interested in selling your Blimpie sub shop? In this review, we discuss the process for determining the value of a Blimpie franchise restaurant and provide a step-by-step guide to selling your sub shop.
About The Blimpie Sub Shop Franchise
The Blimpie sub sandwich franchise is one of the most established restaurant franchises in the United States. There are more than 160 locations across the U.S. They have an established business model and brand recognition that extends across the country. Consequently, many investors are intrigued by the idea of purchasing an established Blimpie restaurant location.
How to Value Your Blimpie Franchise
You can determine the value of your Blimpie franchise by using your seller’s discretionary earnings (SDE) and rule of thumb data (also known as industry multiples). The industry multiples for Blimpie franchise restaurants are:
- Blimpie restaurants sold between 1.67 and 4.98 times the Seller’s Discretionary Earnings (SDE)
- Blimpie restaurants sold between 2.07 and 3.16 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Blimpie restaurants sold between 0.30 and 0.39 times the annual net sales
Although the value you arrive at provides a general idea of your fair market value, you should also consider non-financial factors such as your location, unique competitive advantage, the reason for selling, local reputation, and growth potential. We recommend using the market approach and receiving a professional valuation from an experienced business broker.
You should also check: How to Sell a SERVPRO Franchise Business
How to Sell a Blimpie Franchise for Fair Market Value (FMV)
Blimpie franchise restaurants have a unique sales process. Notably, they must gain an understanding of their franchise agreement and find a buyer who Blimpie is willing to accept as a buyer. The general process includes these steps:
- Planning and preparation
- Marketing and negotiations
- Due diligence process
- Close the sale and transfer ownership
Planning and Preparation
This first stage is your opportunity to plan your exit strategy. This involves establishing your goals, preparing your sales memorandum, and creating your timeline for the sale (which includes when you bring your company to market). The planning and preparation stage also involves collecting the financial and legal documents you need for the later stages of the sale. Your broker may provide you with a specific list of documents. However, in general, the list includes:
- Tax returns
- Profit and loss (P&L) statements
- Balance sheets
- Franchise agreement
- List of employees
- Real estate appraisal or lease
- Insurance policy
Marketing and Negotiations
The next step is to find qualified prospective buyers. This process involves leveraging private channels to maintain the confidentiality of the sale for your Blimpie franchise. Keep in mind, you must also find a buyer who Blimpie is willing to approve as well, which may impact the search. Your broker will screen the offers as they arrive and explain the details for each with you to help you make informed decisions about which is best to accept.
Of course, negotiations are also a part of the sales process. Your goals may go beyond financial motivations (i.e. maximize your sale price). Additionally, the negotiations may also include factors such as keeping your employees, continuing community initiatives, and more. Once you narrow down your list and select a buyer, they sign a letter of intent (LOI) to establish the terms of the purchase agreement.
Due Diligence Process
During due diligence, the buyer reviews your financial information (such as those in the list above), legal documents, and the franchise agreement. They may have a series of questions that they give to you to learn more about the restaurant and to clarify financial and legal information. Your broker may work to ensure the process is structured and remains organized and on track to avoid long delays.
Close The Sale and Transfer Ownership
The last stage is closing the sale and transferring ownership to the buyer. At the closing table, your attorney reviews the final purchase agreement, and you and all other involved parties (including the seller) sign the purchase agreement. The payment is then sent to you, and you will transfer all legal ownership o the Blimpie franchise restaurant to the buyer. You will also need to notify Blimpie of the official change in ownership. This is in addition to keeping them informed throughout the sales process, including receiving their approval to sell to the buyer you choose before closing begins. After this closing stage, you can proceed with your next journey in life, whether it is pursuing other business ventures or retirement.
Sigma Mergers and Acquisition Helps Blimpie Owners Through The Sales Process
We understand how stressful the sales process can be for Blimpie franchise sandwich shop owners. It is our goal to make the process as easy and successful as possible by providing brokerage and consultancy services. Here at Sigma Mergers and Acquisitions, we also offer free, no-obligation valuations to help you determine the worth of your Blimpie restaurant. Schedule a consultation today to learn more and get started.
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!