Factoring Cost of Goods and Labor Into A Sale

By: David Ostrowe
Published: January 28th, 2019

David Ostrowe worked on the corporate side of franchising for Church’s and Taco Bell for years. Today, as a franchisee, he operates multiple locations for Burger King, Taco Bell, and Blaze Pizza. His organization operates three franchise companies: Blazing Partners, 180 Business Solutions, and O&M Restaurant Group.

One of the business skills Ostrowe has developed over his career is buying and selling franchise units. It takes knowledge and experience to know how to decide when to sell, what the units are worth, where the franchisor stands, and a multitude of other factors that can affect the maximization of profit when selling.

If you think selling a franchise unit may be in your future, consider this tip from someone who has been there and done that.

• Keep a close eye on your cost of goods. Hold managers accountable to your ideal cost. Watch waste, spillage, and free items. Keep in mind that every penny you save will hit the bottom line. This will increase your EBITDA and your purchase price.
• Know when and where to cut unnecessary labor and overtime. Replace poor salaried managers with lower-paid shift managers. You typically hire professionals to help you grow. If you’re selling out, replace them.

Related Stories