Broad Strokes and Granular Details

Bottle & Bottega co-founder and new Painting with a Twist COO discusses the sale of her brand to a former competitor.

By Nancy Bigley, CFE

As a business owner, you should be asking yourself several questions: What resources you have in terms of people and money, how can you grow to where you want to be, whether you can raise private equity funds or incur more debt – and what’s a realistic outcome from all these types of questions? If they’re not adding up, perhaps it’s time to consider a sale.

Ultimately, any risk is the franchisee partners’ risk, so you must be non-emotional if the time to sell is now. It’s not about your personal gain; it’s about keeping your brand and your business moving forward. Bottle & Bottega was too small for private equity and wasn’t excited about additional debt from a loan. Early conversations with Joe Lewis, the new CEO of Painting with a Twist, started off well and felt right. In this regard, timing is everything for a business owner. While you may not want to let go of your baby, you must do what’s best for the business and enable it to reach new heights.

Be Heard: Speak Up for Your Brand

Be open to change and open to the option of selling. It takes incredible mental and emotional strength to say it may be time. Verbalizing the notion that you’d consider selling can be humbling. Initially, network with those you trust and have been down the same path. Having said that, do not shout from the rooftops, “I want to sell my business!” You must be thoughtful and purposeful. The franchise community is intertwined with experienced, trustworthy leaders – one of whom suggested Bottle & Bottega speak with Painting with a Twist in the first place.

The first conversation consisted of talking business, not a sale. Joe Lewis, Painting with a Twist’s CEO, offered thoughtful industry insight before considering a sale – we didn’t begin with, “Would you like to buy my company?” Instead, we discussed the landscape of the paint-and-sip sector, our experiences, culture, management styles, our hopes and dreams for our businesses. The purchase was an organic process from there. Obviously, Bottle & Bottega and Painting with a Twist were competitors, but you need to be close and kind to your competition – they may purchase your company one day.

Speaking the Same Language

Adding to the smooth transition was the fact that Bottle & Bottega and Painting with a Twist were in the same industry. The learning curve wasn’t nearly as hard as teaching someone a new business. The transition to becoming Painting with a Twist’s COO was seamless, after eight years of experience with Bottle & Bottega and 27 years working in franchising. Being in the same industry, we’re able to eliminate redundant expenses, such as two websites, duplicate vendors, offices and so on. It’s easier because we speak the same language.

Despite being in the same industry, there’s a fear your voice will not be heard as the smaller brand when the purchase is complete. Don’t let that happen to your brand – focus on getting more resources and assistance to your franchisees, while continuing to ensure their voice and concerns are being heard as plans evolve during the ultimate merging of two brands.

Build on the unique strengths of each brand. Case in point: The heartbeat of Bottle & Bottega is the studio design and the high-quality product innovation, which Painting with a Twist is embracing. We also place added emphasis on a solid infrastructure of systems and processes, and cultivating open and honest relationships with franchisees. This foundation and franchisee relationship model is carrying over to Painting with a Twist, maintaining the culture of Bottle & Bottega. Ultimately a strong sale should be about elevating the success of the franchisees at both brands.

Be Prepared

How do you make it easy for a potential buyer to say yes? This is something to consider perhaps years before you consider selling your business. Thinking about your exit strategy isn’t taking your eye off the ball, but rather ensuring sustained success for the brand you are building. Besides, being prepared for a sale is similar to your day-to-day business obligations: staying up-to-date on your numbers, profit/loss and overall finances. Most importantly, no matter if an exit strategy is something you need immediately or in the distant future, stay focused on the day-to-day operations of your business.

Eye on Operations

Interested sellers may focus too much on the sale itself at the detriment of smooth operations. This is a critical error, as some businesses won’t sell for years or ever at all. Day-to-day business obligations need to continue, including supporting your franchisees, enabling them to succeed before, during and after a sale. After all, a potential buyer also purchases your challenges, and if your relationships and operations are poor despite good numbers, you’ll be hard-pressed to convince all sides to sign on the dotted line.

Remain buttoned-up on obligations like lease terms, renewal dates for each franchise agreement and facets of all contracts, even nuances like cancellation clauses. Also, when you’re considering potentially selling, don’t do something like sign a new three-year contract with a vendor. You don’t want to be locked into long-term commitments the potential buyer may not want to inherit. In this same vein, be completely transparent and upfront to ensure the buyer knows the exact situation – especially if you’re hoping to remain part of the team. Iron out details, both positive and negative, the buyer may have not considered previously, which will avoid hiccups down the road and keep everything running smoothly.

By being upfront, aligning our passions and determining the deal-breakers for both sides, Bottle & Bottega’s sale to Painting with a Twist went smoothly and was easier than most acquisitions. Speak the same language, be prepared and keep operations running smoothly, and yours can be too.

Nancy Bigley, CFE, is Co-Founder of Bottle & Bottega, COO of Painting with a Twist and a member as well as former Chair of IFA’s Women’s Franchising Committee. Learn more about Painting with a Twist at franchise.org/painting-with-a-twist-franchise.