2022 is shaping up to be a great year to sell a franchise. In this article, John Hatt, Managing Director of Business Partnership, explains why he believes now is a great time to sell your franchise.
Not only are businesses selling at record prices, but buyer demand is growing, and sellers are in an ideal position to negotiate with the many entrepreneurs seeking business ownership. Here are three reasons 2022 is proving to be a good year to sell your business.
- Sellers are in the driving seat
So far, 2022 has proven itself to be a seller’s market. During the pandemic, many business owners chose to wait to sell their businesses which created an imbalance in the market. So, what we are seeing now is that buyer demand exceeds the supply of available businesses for sale. We can expect median sale prices to continue growing as buyers have to pay premium prices for these businesses. To conclude, 2022 could be the perfect time to act – as the effects of the pandemic fade and more people retire and exit their businesses, the market is expected to become more balanced.
- US statistics prove there is a demand to sell
BizBuySell’s Insight Report states that business for sale transactions have experienced steady growth in the first quarter of 2022, rising 24% over the previous year and just 3.7% shy of Q1 2019, long before COVID-19 shocked the market1. Median sale prices have also continued to sit at record levels, up 6% over the previous year to $345,0001. These US statistics show that not only is there a demand to sell, but buyers are willing to pay a premium for businesses that are performing well. We expect a similar movement to take place in the UK over the next couple of years.
The businesses that seem to be performing well when it comes to sales often share three common traits: they have well-trained and skilled employees, are in great locations, and have great long-term growth potential. The service sector has performed particularly well. Businesses in this sector have proved themselves to be recession and pandemic proof in recent years and are therefore the most sought-after among buyers. From healthcare and nursing facilities to gardening franchises, car washes and laundromats, these businesses, many of which are essential, offer steady streams of income and are less likely to be impacted by economic uncertainty.
- People want to be their own boss
According to PwC’s Global Workforce Hopes and Fears Survey 2022, one in five workers plan to quit their jobs in 20221 in the pursuit of higher salaries and more fulfilment in the workplace. So, it is no secret that with the Great Resignation more individuals are choosing entrepreneurship over returning to the 9 to 5 job.
With people looking to take on their own business ventures, franchises are in pole position to benefit from this work revolution as they get to run their own business and have the support and guidance from the franchisor. A privilege new business owners don’t have when starting an independent business.
About the author:
John Hatt is Managing Director of Business Partnership, a unique national franchise network of regional offices connecting business sellers with business buyers. With over 20 years of experience helping businesses sell quickly at maximum value, John understands the practical and personal issues involved in selling a business, and Business Partnership provides a personal, professional, and confidential service to buyers and sellers alike.
1BizBuySell, 2022, BizBuySell Insight Report
2 PwC, 2022, Global Workforce Hopes and Fears Survey