Multi-Unit Franchisee Magazine Issue IV, 2013 | Page 80
ExitStrategies
By Dean Zuccarello
Let’s Make a Deal!
Keep your eye on the big picture
during negotiations—and persevere
R
ecently, we represented a multiunit operator in the sale of a
tier-one franchise business that
had to overcome numerous
hurdles to achieve a successful outcome.
The company had suffered as a result
of the recession, challenges in the local
economy, and some operational challenges
on the part of the existing operator. The
company was underperforming the brand
and lacked the resources needed to pull
itself out of its downward spiral. Many
units were old and tired, and in desperate need of remodeling. Several units
needed to close. Operations had suffered
and turnover and employee morale were
a continuing challenge.
To arrive at a successful transfer,
concessions were required from
landlords, lenders, and the franchisor. During the process, and
afterward, we were able to reflect on
the unwavering commitment and
perseverance of the buyer, which
were paramount in reaching the
finish line. The character, tenacity,
and insight we observed by the
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Multi-Unit Franchisee Is s ue IV, 2013
An acquirer must
have a truly
intuitive feel for
the opportunity
up front, and
an unwavering
commitment
throughout the
process.
buyer were so compelling and refreshing
that we just had to share the story.
In our more than 30 years of doing
transactions, we’ve seen a lot of different
types of buyers: strategic buyers, financial
buyers, consolidators, opportunistic buyers, you name
it. We’ve seen parties to
transactions make many
mistakes along the way,
but we have also seen
many successes. What
this particular transaction reinforced for us is
that to get it done, an
acquirer must have a
truly intuitive feel
for the opportunity
up front, and an unwavering commitment throughout
the process. This
particular buyer was
able to look past the
“small stuff” because he
had a clear view of the big
picture: the tremendous
value he knew he could
create. The opportunity
was not centered on what the seller had
or had not done, but rather on what the
buyer knew he could do with the business.
The buyer in this instance was a very
successful, long-term industry player with
a tremendous track record. His focus was
on assessing the value of the opportunity
and what it meant to his organization—
before submitting his offer to acquire the
business. He also knew that investments in
people, facilities, systems, and operations
would result in dramatic improvements
to the business. He never lost sight of
the prize, and once he decided to move
forward all hurdles were treated as if
they would be overcome. His focus from
the very beginning was to close the deal
without getting hung up on the obstacles
of the process.
He also understood H[\ܝ[