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1. Private equity buyers want proof of franchise model quality, specifically strong unit-level economics and positive franchisee validation

This means to get top dollar, it’s not enough to have a strong franchise value proposition for franchisees. You must track system metrics and show positive trends over time. Collect franchisee profit and loss statements from the beginning. Standardized point-of-sales systems can help collect unit-level performance information that buyers will want to see. Franchisee satisfaction surveys should be implemented. If franchisee feedback isn’t strong, move quickly to address issues and communication gaps.

Related: Thinking of Selling Your Franchise to a Private Equity Firm? Here Are 9 Ways to Build a Valuable Reputation

2. There must be additional evidence of brand momentum through new unit openings, same-store sales growth, significant open whitespace and other growth opportunities yet available

The operating model must be replicable, and there must be proof.For example, can you demonstrate that you open 100% of the units you sell? Are franchisees ramping to profitability within 18 months or fewer? That is much more valuable and important than selling a bunch of multi-unit licenses that never open. Do franchisees experience a solid cash-on-cash return? Buyers especially get excited when they see existing franchisees returning to buy new expansion units.

Private equity sponsors want to see strong growth potential within their own planned hold period. But they also want a terrific growth story for the next sponsor as well to command a good exit price. Franchise businesses can trade between private equity (PE) sponsors multiple times. Technically, this is called a “secondary buyout” (whether it’s the second PE-to-PE transaction or the tenth). I prefer to think of it as the PE Profit Ladder. At each step, new sponsors need to see a compelling long-term growth story for the business to command premium enterprise value.

3. If No. 1 and No. 2 are missing or weak and if the evidence doesn’t match the hype, PE quickly moves on

While you may be selling franchise licenses, that in and of itself doesn’t make your business attractive. It validates that you’re good at selling franchises, not that PE will find your company attractive. You may have even received (or paid for) flattering press coverage. Are you starting to believe your own press? Buyers may be calling you with effusive, “We’d love to talk about your business,” messages. After basking in the warmth of some positive market attention and getting these phone calls, the transition to engaging seriously with a seasoned PE buyer who assesses your business with a swift, clinical eye can feel like suddenly walking into a freezer. Where did the love go?

Related: Is This the Right Time to Sell your Franchise to a Private Equity Firm?

4. This is where your franchisee-franchisor relationship karma will finally catch up to you

Your franchisees have tremendous power over your sale outcome. If that idea strikes fear into your heart, you know where your work begins. Call it “turnabout is fair play,” “revenge of the franchisees” or whatever you like.

If you’re a franchisor, your ability to sell your company to private equity at a high price with great terms depends on the quality of your relationship with your franchisees, strong return on investment for franchisees and the quality of operators you attract to your system.I’ve seen this collapse of the hype-machine dawn on sellers far too late. PE’s brutally cool, fact-based assessment and the importance PE attaches to franchisee satisfaction, profitability and positive references about their franchise experiences can be jarring to some sellers. If you’re used to acting independently as a founder, it can feel like turning in your high school math test and getting it back with a bunch of red pen mark-ups. Whatever attention you are, or are not, currently investing to ensure strong franchisee profitability, the market will one day hold you accountable.

The demand for creative talent is perhaps stronger than ever. The World Economic Forum recently cited creative thinking as the second most important employee skill in 2023.

Likewise, a survey of business leaders conducted by Pew Research Center identified creativity as among the most frequently mentioned skills employees need to be successful.

Given such realities, many of today’s workers face unique pressures to standout from their peers and establish a name for themselves as the “creative” in their organization.

But such pressures are not unique to lower-level employees. Being seen as creative is also becoming increasingly associated with effective leadership. One IBM survey, which focused on 1,500 CEOs across 60 countries and 33 different industries, found that “creativity is now the most important leadership quality for success in business, outweighing even integrity and global thinking.”

In many ways, this makes intuitive sense. As business has become increasingly global and dynamic, members at all levels of the organizational hierarchy are expected to develop cutting-edge approaches to improving processes, procedures and practices they encounter in their role.

As entrepreneurs, we hate seeing lost opportunities, especially when they are pitfalls we could have avoided. Hiring pitfalls are some of the most common mistakes we make.

As an entrepreneur for 15+ years, I’ve made my fair share of mistakes in the hiring process and lived through those pitfalls just as much as the next. I have seen businesses clean up those common mistakes and radically transform their business by having more and better-qualified candidates.

There is a common trend to identify you have hiring problems. Chances are some or all of these signs resonate with you:

1. Not getting qualified candidates
2. Lack of response from candidates
3. Taking way too much time to hire
4. New hires leaving faster than coming in
5. Compensation feels more like a guessing game

Related: 3 Difficult Workplace Personalities That Are Great Hires

Hiring the right people is one of the most important things a small business can do to succeed. But with so many great job opportunities out there, it can be tough to stand out from the competition and retain the best. That’s why optimizing your hiring process is important to attract and retain the best possible candidates.

Across the world, energy systems are going digital. Electricity bills are more and more likely to pop up as an alert on your phone rather than popping through your letterbox. And many people now monitor their energy usage at home through smart meters that predict charges in real time.
In the UK, nearly all energy companies now rely on digital forms of communication to reach and engage with their users. And as the energy system transitions towards greener and more flexible ways of serving its customers, we’re likely to see digitalisation accelerate.
Digital systems certainly have their benefits, including easier service monitoring for suppliers and more clarity around bill breakdowns for customers. Yet despite the UK being a global leader in digital technology, there’s still a significant “digital divide” between those who have full access to the digital world and those who remain excluded from it. This gap has only expanded during the pandemic.
There are hundreds of ways for people to become digitally excluded. Some might not have access to digital technologies, or be able to afford them. Others might own them, but not know how to use them – or how to learn. And some might not be inclined to use new technologies in the first place.

People’s living arrangements can also contribute to digital exclusion. Those stuck in temporary or precarious housing, including low-income families, refugees and migrants, may struggle – legally or financially – to add money-saving energy technologies to their homes.
Financial inequalities can also heighten this exclusion. Energy companies may block people with debts from accessing the digitally monitored, cheaper energy tariffs. And it can be very challenging for people without proficient levels of English to deal with digital services that are only offered in English.
Consequences
Overall, it’s the most vulnerable within society – refugees, older people, low-income families, disabled people and many others – who are disproportionately affected by digital exclusion.
The consequences of this can be severe. If you can’t search for better deals, understand what payments are being taken, access smart technologies like meters or learn about ways to increase energy efficiency, it becomes much harder to save money and could easily lead to a cycle of missed bills and defaulted payments. Research suggests digitally excluded customers pay an average of £348 more per year on their energy bills.
Many vulnerable groups rely on traditional forms of communication with their energy suppliers, like letters, phone calls or visits. When these are disrupted, for example through pandemics or extreme weather events, inability to pay or understand bills can lead to life-threatening situations, like illness due to cold homes.
Solutions
The good news is that there are ways to overcome the challenges of navigating these systems. For refugees, migrants, older people and those less familiar with the UK’s digital energy system, barriers can be overcome by turning to trusted connections such as friends, family or community organisations.
These connections provide people with advice and guidance about energy services, translate bills, help them explore how to use new technologies or act as the mediator between them and energy suppliers.
Energy companies appear increasingly aware of the challenges associated with digital exclusion for their customers. As already encouraged by UK energy regulator Ofgem, companies shouldn’t rely solely on digital forms of communication. Instead, they should explore and respond to how their consumers prefer to interact with them. This could take a variety of forms, like developing in-person group support sessions in areas where digital exclusion is high.
And the importance of community shouldn’t be overlooked. Local age and language support groups are vital to help people navigate a complex and often expensive energy system on their own terms.