Exit Strategy
Not all businesses have a good exit strategy. We have crafted our model to provide for a significant sale value when a Franchisee decides to sell their business.
Every client has a future revenue stream attached to it – usually for a minimum of three years. This is another reason why the three-year Service Agreement is so important.
We have provided our Franchises with a tool to calculate the present value of the future cashflow on a client-by-client basis so they can track the building value of their business as they go along operating their Franchise.
However, that’s not the only thing that adds value to the sale price. Our client relationship programs provide for a high level of renewals creating long term relationships, and therefore more sales value per client. In addition, the value increases with the number of supplemental recommendations generated from that client base. The referral experience with the client base also increases the sales value.
The net result is that a Schooley Mitchell Franchise is not just a vehicle to create income but also a vehicle to build an asset of value for your future. The longer the annuity stream, the more frequent the supplemental recommendations, the more renewals with clients, and the more referrals received from those clients, will all increase the asset value significantly.
We had a Franchise sell that sold for $4.5 million, and another for just under $2 million.
Client Protection System
As mentioned, we do not have territories based on geography so there are no artificial limits on where you get clients. However, we do protect your asset by providing two registries.
The Permanent Client Registry is used to protect any client you sign. That is really important from three standpoints. Firstly, it protects your asset that can be sold at exit time. It also means we don’t look unprofessional approaching each other’s clients. Thirdly, it protects your ongoing revenue stream from every client you obtain.
We also have a registry that protect prospects within certain limits. This registry means that your tactics and strategies to obtain clients are protected and are not at risk. We have used this system for 20 years and it works great.
SMARRT System
We are unaware of any business that has a program that is so unique and valuable as the SMARRT Program (Schooley Mitchell Attracts Referrals & Renewals by building Trust). This system is designed to increase the level of value in your relationships with all clients by providing them complimentary extra value on a continuing basis.
The program provides for 14 different deliveries of value over a three-year period for each client – and it costs the client nothing. We do things like promote them on our website, promote them on our social media, send them a business book, write a story about them or a charity they support, post a video about their business, send them Schooley Mitchell chocolates, and many other gestures of value.
We have a staff of people at head office that executes all these steps for our Franchisees’ clients. The resulting value for our Franchisee is that clients want to continue doing business beyond the original three-year Service Agreement (renewals). They are also much more likely to refer other businesses to our Franchisee.