Key takeaways from the panel of M&A experts at the 2024 Springboard Conference, moderated by Alicia Miller of Emergent Growth Advisors: "The Art of the Deal - How founders can prepare in advance to achieve the best possible outcomes."
1) First and foremost: focus on unit level economics - profitable & happy franchisees build maximum enterprise value! So simple, yet often overlooked!
2) Collect franchisee P&Ls AND cash flow statements from the beginning and use that information to coach to better results. Buyers will want to cut this data multiple ways
3) Recruit franchisees carefully - quality over speed
4) Ensure you're opening what you're selling or that sold-not-open funnel will go from looking attractive to being a liability. If you can prove you're opening them and ramping franchisees to profitability quickly, you may be able to recapture some of that SNO value in a transaction (aka "full maturity value")
5) Get to know the landscape of potential buyers early - socialize and look for cultural fit
6) Track record matters, especially if you plan to roll equity (and most buyers want you to do this)
7) Know what you want to accomplish and what you're looking for in a potential capital partner
8) Deal terms can be tricky - experienced advisors can help you navigate
9) Franchising continues to see robust buyer interest, but there is still a bit of a gap between buyer and seller expectations
10) It's tough to make forward predictions, but the panel was pretty optimistic that 2025 is going to be a busy year for franchise M&A