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We own a 5 year old carpet cleaning business up for sale. We have sold our trade name / training package in t

I own and manage a very successful home based green carpet cleaning company that is seasonal from May to November, and have decided to sell the business as a distributorship, We will provide additional services to the new owner such use of our registered name and logo, advertising designs, accounting system, website presence, training, and new equipment. We have successfully sold two other distributorships that were undeveloped. My question is: Most authorities on selling businesses say not to disclose the name of the business right away. But all the franchise opportunities play up the name. which should I do?

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The BAF Group LLC
MD

It depends on the business and whether it is a start-up or an ongoing business. Frankly, I am against disclosing the name of a mature business for sale, under any circumstances. When you disclose, it can cause customers to stay away; they may think, "Tim is selling - service will take a nose-dive!" And you want your Revenue to remain as high as possible, during the entire sale process. Employees can get REAL nervous and decide to leave, thinking the new Owner will come in with his own crew, and they will be out of a job anyway. Your Suppliers can get just as nervous, thinking that you might stiff them for your last invoices, leaving them no way to recoup their payments, if you disappear. And if you have Accounts Receivable, those Customers may try to skip on payments to you, thinking that you are leaving and would no longer come after them. LOTS of reasons not to disclose the name. If you are selling a new or start-up opportunity, such as a Franchise might in introducing the new concept to the area, none of these things come into play. So, the difference is whether you are selling the mature operation, or the opportunity for a Buyer to purchase into a new concept. I hope I understood your question and provided the appropriate answers...

May 22, 2013

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