The Importance Of A Non-Disclosure In A Sale

Selling a business can be a delicate process. David Ostrowe knows all about it. His background includes years working on the corporate side of franchising for Church's and Taco Bell. 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.

• Why it's important to prepare a confidential information memorandum.
  All franchisor and broker offerings put together a confidential information memorandum or a "book of business." This offering will contain every aspect of the sale, including a non-disclosure. The last thing you want is for your employees to hear about the sale from anyone but you. In reality, there is little to no change to anyone's employment status, but employees will feel betrayed and will focus on nothing but the pending transaction. Include the proposed transaction and structure. Consult with your CPA on the tax implications of your sale.