Many Budget Blinds franchise owners begin to feel overwhelmed by the complexities involved with the sales process. The good news, however, is that the sales process does not have to be challenging or stressful. In this review, we discuss the process for determining the value of your Budget Blinds franchise store and selling for fair value on the market.
About The Budget Blinds Franchise
There are more than 1,200 Budget Blinds locations across the United States. Budget Blinds’ mission, according to its official website, is to provide a range of high-quality window coverings at budget-friendly pricing. They are one of the most dominant franchises in the industry. Notably, Budget Blinds offers the following:
- Window coverings
- Home décor products
- Home renovation products
- Draperies and shades
For many investors, this is an intriguing industry. The dominance of Budget Blinds within the market makes it harder for independent stores to compete, which makes the purchase of a Budget Blinds store highly appealing to many.
How to Value a Budget Blinds Franchise Store
We strongly recommend a professional valuation before you begin the sales process. This allows you to determine what is considered a fair value for your Budget Blinds store. Specifically, we recommend a market approach. This involves the identification of your EBITDA and SDE and the application of industry multiples (rule of thumb data). The rule of thumb data for Budget Blinds franchise stores is:
- Budget Blinds franchise stores sold between 2.04 and 2.93 times the Seller’s Discretionary Earnings (SDE)
- Budget Blinds franchise stores sold between 2.82 and 4.36 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Budget Blinds franchise stores sold between 0.39 and 0.47 times the annual net sales
How to Sell a Budget Blinds Franchise Store
There are many complexities involved with the sales process for Budget Blinds franchise stores. We recommend breaking the process down into steps. Here are the most common steps you can expect:
- Review the franchise agreement
- Request permission to sell your budget blinds store
- Prepare the sales documents you need
- Find a buyer with a confidential approach
- Negotiate and secure a buyer with a signed letter of intent (LOI)
- Receive final approval to sell your budget blinds store
- Allow the buyer an opportunity for due diligence
- Schedule and attend the sale closing
- Transfer ownership of your budget blinds store
1. Review The Franchise Agreement
Your franchise agreement with Budget Blinds may have some stipulations as it pertains to selling your store. Of course, you are allowed to sell, but there is a certain process you must follow that involves keeping Budget Blinds informed along the way and receiving final approval from them to sell to your preferred buyer. Therefore, a good first step to take is to simply review your purchase agreement.
2. Request Permission to Sell Your Budget Blinds Store
As mentioned, Budget Blinds must provide approval for you to sell your franchise store, so the next step is to receive permission. Your broker and attorney can help ensure there are no complications during this step.
3. Prepare The Sales Documents You Need
Next, you will need to prepare your legal, financial, and operational documents; you may need these documents later in the sales journey. You may already have many of these documents within your possession, especially if you collected them for your broker to perform a business valuation. Your broker can provide a full list of documents you should collect.
4. Find a Buyer With a Confidential Approach
Once you are fully prepared, it is then time to seek a buyer. You should only utilize private and fully-confidential methods to do so. Of course, your broker should handle much of this process for you. They may also recommend the use of blind listings and/or non-disclosure agreements (NDAs) if necessary as well.
5. Negotiate and Secure a Buyer With a Signed Letter of Intent (LOI)
Your broker will screen offers as they arrive and begin the negotiation process with qualified buyers who have made at (or close to) a fair market offer. With your non-financial goals in mind also, your broker can work to secure a buyer who maximizes the sale price and locks the deal in with a signed letter of intent (LOI).
6. Receive Final Approval to Sale Your Budget Blinds Store
Once you secure a buyer, you may need approval from Budget blinds to ensure the buyer is qualified and a good representative of the Budget Blinds brand. If you have communicated with them throughout the process, then this should be a relatively simple and quick step.
7. Allow The Buyer an Opportunity for Due Diligence
As is the case with all business sales, the buyer has the opportunity to review the details of your business to verify the information presented in the sales memo and throughout negotiations are legitimate. Specifically, this could involve providing documents to the buyer, answering questions for clarification and informative purposes, and allowing the buyer to visit the store and possibly meet with your top employees.
8. Schedule and Attend The Sale Closing
You can close the sale after due diligence. During closing, your attorney (and the buyer’s attorney) will review the purchase agreement. You and the buyer will also sign the purchase agreement, and they will send the final payment for your Budget Blinds store.
9. Transfer Ownership of Your Budget Blinds Store
Lastly, you will transfer ownership of the store to the buyer, which may also take place during closing. This involves providing full access to your store (keys, online systems access, employee records, etc.). You will also update legal information to reflect the change of ownership, update insurance and lease policies, notify Budget Blinds that the sale is complete, and notify your employees and customers. In some cases, the seller may continue to assist with the ownership change to ensure a smooth transition.
Are You Planning Your Exit Strategy?
Sigma Mergers and Acquisitions helps franchise owners plan their exit strategy and sell for fair market value. If you are the owner of a Budget Blinds store (or another business type) and would like to discuss your exit strategy with a qualified and experienced business broker, then schedule a consultation with us today.
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!