Are you considering selling our Bruster’s Real Ice Cream franchise restaurant? If so, then this complete guide from an experienced business broker provides all the information you need to get the sales process started and to properly prepare for each stage.
About The Bruster’s Real Ice Cream Franchise
Bruster’s Real Ice Cream provides dessert items (including a range of ice cream flavors and types) to consumers. There are more than 180 Bruster’s franchise locations across the United States. There is demand for Bruster’s restaurants, especially in certain areas where the demand for tasteful frozen treats are highest.
How to Value a Bruster’s Real Ice Cream Franchise Restaurant
Your broker will use a market approach. This involves the identification of your earnings before interest, taxes, depreciation, and amortization (EBITDA) and your seller’s discretionary earnings (SDE). Rule of thumb data also applies, which is as follows:
- Bruster’s Real Ice Cream franchise restaurants sold between 2.20 and 2.90 times the Seller’s Discretionary Earnings (SDE)
- Bruster’s Real Ice Cream franchise restaurants sold between 2.76 and 5.94 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Bruster’s Real Ice Cream franchise restaurants sold for approximately 0.43 times the annual net sales
Rule of thumb data takes into consideration recent sales data to determine how much prospective buyers are willing to pay for your company based on existing market conditions. This is also known as your fair market value. Of course, other factors, some of which may not show up in a financial report, also factor into your valuation, such as your Bruster’s restaurant location, growth potential, and reason for selling.
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How to Sell a Bruster’s Real Ice Cream Franchise Restaurant
The sale of any franchise involves a unique sales process as you will need to keep the franchise (in this case Bruster’s) informed. They will also need to provide permission to sell to your preferred buyer. The general steps of the sales process are:
- Plan your exit strategy
- Bring your Bruster’s restaurant to the market
- Secure your preferred buyer with a letter of intent (LOI)
- Allow for due diligence and prepare to close the sale
- Close the sale with a signed purchase agreement
Step 1: Plan Your Exit Strategy
The first step should be to simply plan your exit strategy. Establishing a plan (with the assistance of a qualified business broker) helps ensure a smooth and successful sale of your Bruster’s Real Ice Cream franchise restaurant. Your exit strategy should include:
- Choose a qualified business broker
- Determine the value of your restaurant
- Establish your exit strategy goals
- Determine your sales approach
- Set your sales timeline (tentative)
In addition to a business broker, you may also benefit from working with a qualified attorney and a certified public accountant (CPA). Your sales goals may go beyond maximizing the sales price. Non-financial goals such as finding a buyer who keeps your employees may be important to you as well.
Step 2: Prepare for The Sales Process
It can be frustrating not to enter the market immediately. However, it can really pay off (literally) long-term to take your time and prepare properly before you seek a buyer. The pre-marketing stage should also include preparing your documents, reviewing the purchase agreement, and notifying Bruster’s of your intent to sell.
Step 3: Bring Your Bruster’s Restaurant to The Market
Once you are fully prepared, it is time to find a buyer who is willing to pay fair market value and meet your non-financial goals. However, you must only utilize private channels as you do not want news of your sale to leak prematurely. This is why it is strongly encouraged to work with a business broker. They have contacts and connections in your area and industry and understand how to utilize confidential networks and databases, along with using non-disclosure agreements (NDAs), blind listings, and other strategies when necessary.
Step 4: Secure Your Preferred Buyer With a Letter of Intent (LOI)
Ultimately, you will negotiate a deal with your preferred buyer, who will then sign a letter of intent (LOI) that establishes the purchase terms, amount, and method (financing, paid in full, etc.). The letter of intent sets into motion the due diligence stage (see below).
Step 5: Allow for Due Diligence and Prepare to Close The Sale
As the seller, your goal is to ensure due diligence moves quickly. This helps ensure there are no setbacks and the buyer does not back out of the deal due to unforeseen circumstances. You can help ensure due diligence moves quickly by having your documents ready and choosing a buyer who understands how to ensure due diligence remains structured and on schedule.
Step 6: Close The Sale With a Signed Purchase Agreement
The closing stage involves reviewing the purchase agreement, attaining final signatures, confirming the payment was sent and transferring ownership of the company to the buyer officially. You will also need to notify Bruster’s that the sale is complete and inform your employees of the ownership change and how it may affect them.
Speak With a Qualified Business Broker During a Consultation
Sigma Mergers and Acquisitions takes pride in helping franchisors sell their restaurant for fair market value. We also help ensure you have a stress-free and quality experience throughout every stage. If you have any questions or concerns, or if you would like a free business valuation from an experienced business broker, contact us today and schedule a consultation.
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!