When 'Zees Coast, Brightstar CEO Urges them to Sell

What to do when a franchisee achieves a comfy lifestyle and then starts to coast? To Shelly Sun, CEO of Brightstar Franchising, that’s the time for a frank conversation about why now may be the best time to sell.

She was one of many execs who shared tips for dealing with a franchisor’s thorniest problems at the annual Faegre Baker Daniels Franchise Summit in Minneapolis in August.

Sun is a CPA, so she already spends plenty of time with prospective and current franchisees on financial metrics. It’s no different if she’s laying out the case for them to sell—which she doesn’t hesitate to do.

“We started a resale program, looking at the franchisees that aren’t growing, that have checked out,” she says. “Some people think resales are a negative, but we think proactive resales are a positive for the franchisor and the franchisee.”

Here’s why, as she’ll readily explain. An owner who isn’t growing revenue will nonetheless face rising costs, so in time their profit margins will shrink along with the value of their business. If they really don’t want to commit to growth then they’re better off selling at their peak.

The resale program is successful, she says. “Every one of those proactive resales we’ve done—and we’ve done 11—we’ve seen 50 percent revenue growth within six months” after a new, fresh owner took over.