When to sell your business- The Story of La Quinta

Written by Sparkleminds

When to sell your business- The Story of La Quinta

La Quinta in Spanish means “The fifth”. It can also mean “the country place”. The story of La Quinta started out at San Antonio, Texas in 1968. La Quinta corporation was made the parent company of the subsidiary called La Quinta properties as they grew to be a large chain with a standardized company-owned hotel and franchised hotel with a symbol of LQ. It also grew outside the United States across Canada, Mexico, and Honduras. La Quinta now has its headquarters in Irving, Texas. In January 2006 a merger closed between a private equity firm, Blackstone group and La Quinta properties for $3.4 billion paid by Blackstone group in cash and debt.

In April 2014 LA Quinta holdings inc was listed on the New York stock exchange where they sold shares to the public for the first time.

Wyndham worldwide corporation via Wyndham hotel group manages owns and manages many brands in the hospitality industry. Wyndham has a long history of acquiring any successful hotel brand that it can acquire and now it is acquiring La Quinta’s hotel franchise business. The acquisition is happening for a price of 1.96 Billion USD, 8.4$ per share in cash will be paid to the stockholders of La Quinta and 715 million of La Quinta’s debt will be repaid by Wyndham Group. Further, Wyndham will pay taxes after the acquisition that is expected to close in the second quarter of 2018.

Wyndham Group aims to expand its presence to reach further into the fast-growing upper middle scale segment to position its brands as the preferred choice in the hospitality industry. Indian market happens to type of market that Wyndham is trying to reach to. Wyndham is planning to add 40 new hotels by 2020 in addition to its hotels which are operated under the brands like Howard Johnson, Brands Days and Ramada Encore.  Regional Vice president Deepika Arora emphasized that India is a key market for a group and they plan to introduce new brands in India with Wyndham Grand scheduled to open in 2020 in Bengaluru. The acquisition of La Quinta by Wyndham could mean that La Quinta may be one among the brands that Wyndham will introduce in India. The new brands who enter the Indian market in the franchising model usually give a master franchise for the country. However, the companies that want to experiment the Indian market and expand slowly will recruit unit franchises to target only certain locations.

The right time to sell a business is not when it is under loss. There is little to talk about a business that is sold under loss and it is not a good sale even if it sold. So what is a good sale and when is the right time to sell your business?

Sell it when you find a great buyer.
Who is the right buyer? The right buyer is the one who can grow your business better on a larger scale. The buyer should not only have better investment capabilities to buy your business at a good price, he should also be able to accelerate its growth rate.

Sell it when the company has outgrown your skill set.
It requires humility for an entrepreneur to accept that the expertise and leadership of other professionals in the company surpass his own. When the company is reaching out to the areas where you have no expertise selling the company to those capable in those areas is an excellent exit strategy. Converting your position in the company into a sleeping partner to enjoy the dividends and stop involvement in the management is a good an option at the point. Indeed a few shareholders La Quinta can still adopt this strategy and stop voting on policies.

Sell it when the business can be automated:
A business that can be automated can also be developed into a franchise. This kind of business that has been developed into a franchise is likely to have a very high market value. The automated business can be sold at a very high market value. This is one of the reasons La Quinta is being sold to Wyndham for a high price.

Fill in an Enquiry Form to find out if you can develop a franchise to increase the value of your business. If score above 500 on the franchise quiz you can get started with franchise expansion in a very short period of time.

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