Apparently, Selling Businesses Is a Franchise Too

By Sean Goldsmith

Transworld has built a 500-market franchise around helping entrepreneurs buy and sell privately owned businesses.

Transworld Business Advisors has joined The Franchise Entrepreneur’s Brands directory after passing 500 markets worldwide. Its franchisees spend their days helping other entrepreneurs do something most will only do once: sell the business they built.

Selling a restaurant, engineering company or local service business is very different from selling a house. There is no obvious marketplace, the employees may not know it is for sale and the owner may have no idea what the company is actually worth. That is the business Transworld Business Advisors has spent more than four decades building.

The company started with a single office in South Florida in 1979. Today it has more than 250 offices, more than 1,000 active brokers and a presence across more than 500 markets worldwide. Transworld says it has been involved in more than 15,000 business sales over its history. It has also joined The Franchise Entrepreneur’s Brands directory, which gives us a good reason to look at a franchise most people will never see on the high street.

So What Does a Transworld Franchisee Actually Do?

A Transworld owner spends much of the job finding people who want to sell businesses and people who want to buy them. That sounds fairly straightforward until you consider what is actually being sold. A business can include employees, customers, equipment, contracts, leases, intellectual property and years of financial history. The seller may have spent 20 or 30 years building it and have a large part of their personal wealth tied up in the eventual sale.

Confidentiality matters as well. An owner may want to find a buyer without employees worrying about their jobs, customers wondering whether the company is in trouble or competitors discovering the owner's plans. Transworld brokers help owners prepare businesses for sale, market them confidentially, qualify potential buyers and work through negotiations towards a completed transaction. The company also works in mergers and acquisitions and franchise-related advisory services.

For the franchisee, the working day therefore looks very different from most familiar franchise businesses. There is no stockroom to manage or lunchtime rush to prepare for. Much of the value comes from knowing local business owners, finding credible buyers and being able to keep a complicated transaction moving.

You Need More Than One Deal on the Table

Business brokerage can pay well when transactions complete, but transactions take time and plenty can go wrong before the money changes hands. A buyer can lose financing, a seller can change their mind, due diligence can uncover a problem or two parties who appeared to agree on a price can discover that they disagree about the terms.

A broker therefore needs several opportunities moving at once. That means developing relationships with accountants, lawyers, lenders, wealth advisers and other professionals who regularly meet business owners thinking about retirement or succession. It also means continually finding buyers rather than waiting for one large transaction to provide the year's income.

This is where Transworld's size becomes useful to an individual franchisee. An owner may know their local business community extremely well, but the right buyer for a company does not necessarily live in the same town. A network of more than 1,000 brokers gives individual offices access to buyers and opportunities beyond their immediate territory while allowing them to retain the local relationships that bring businesses onto the market.

There Are Plenty of Businesses That Need New Owners

The underlying market is easy to understand because every business owner eventually has to decide what happens next. Some have children who want to take over, while plenty do not. Employees may know the company inside out but lack the capital to buy it. Other owners simply reach the point where they want to retire, start something else or take some of the value they have built off the table.

The difficulty is that many owners spend far more time thinking about how to grow their company than how they will eventually leave it. Transworld has built its business around helping with that decision and the transaction that follows. Its international expansion, including a move into India, takes the same service into markets with large numbers of privately owned and family-run companies facing similar succession questions.

That gives the franchise a customer problem with a very long shelf life. Businesses will continue to be started, owners will continue to retire and many of those companies will eventually need somebody new to own them.

Why 500 Markets Matters

A 500-market milestone gives Transworld something to celebrate, but the size of the network also has a practical use for its franchisees. A seller wants the best credible buyer for the company, and that person may be hundreds or thousands of miles away. A larger network gives brokers more places to look while individual franchisees continue developing the local relationships that bring businesses to market.

That approach has taken Transworld a long way from its first Florida office. More than 45 years later, the company has built an international franchise whose owners spend their working lives helping other owners decide what happens to their businesses next. Transworld franchisees are entrepreneurs themselves, which means they are advising customers through a decision they can understand particularly well: what to do with a business once you have spent years building it.

What We Can Learn From This

Transworld shows how a franchise can grow without relying on shops, stock or thousands of consumer transactions. Its owners need strong local relationships, a steady pipeline and the patience to work on deals that can take months to complete, while the 500-market network gives them a much larger pool of buyers, sellers and fellow brokers to work with. Franchisees considering professional service concepts should look closely at where leads come from and how long it takes for those leads to become revenue. With thousands of business owners eventually needing an exit, Transworld has built its franchise around a job that is unlikely to disappear.

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