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Tips for Accounting Cost of Goods and Labor Into A Franchise Sale

Adding costs of Goods and Labor into a Franchise Sale

As a franchisee, David Ostrowe 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. However, he worked on the corporate side of franchising for Church’s and Taco Bell for years.  Securing a clean franchise sale is important.

One of the business skills Ostrowe has developed over his career is buying and selling franchise units. It takes knowledge and experience to decide when to sell, what the units are worth, where the franchisor stands, and many 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 of the sale. Watch waste, spillage, and free items and keep those to a minimum. 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.

 

close up of graphs / franchise sale

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