The right time to consider an exit strategy is when your business is developing. The best value for your brand is realized when you start franchising development with exit strategies in mind. There is a significant investor interest in the franchise industry. Beginning from 2010 dozens of mergers and acquisitions franchising transactions have closed and the trend is increasing. Private equity groups have more than 800 billion in cash and strategic buyers have more than 4 trillion to invest. It creates a potential demand driving prices to rise. Small business financing may be problematic at times but the availability of bank financing for large acquisitions enables private equity firms to use leverage while paying high prices for best quality franchisors.
Havmor is an ice cream shop that started in 1994 in Karachi. It moved to Ahmedabad within 3 years following the partition of India. A large number of ice cream shop owners and small entrepreneurs tied up with Havmor as franchisees. It grew to be a prominent brand with more than 40000 outlets across India by 2016. The brand has been growing at a CGAR of 23-25%. It had a turnover of about 250 crores in 2012 and its turnover was about 450 crores during FY 2015-16. In 2016 Havmor had expected its sales to double by 2020. It had aimed to increase its sales to 1000 crores.
