Franchisor Resale Program

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Succession is central to franchise system performance. When the resale process is managed proactively:

• The right franchisee is in the right location at the right time.
• The brand gains stronger operators who drive systemwide results.
• New franchisees invest with the confidence that they can exit at a future gain.
• Existing franchisees are motivated to continually reinvest and grow value.
• Underperforming franchisees can transition with less disruption.
• Successful sellers become high-credibility brand ambassadors. 

A well-designed resale strategy strengthens unit economics, reinforces brand standards, and contributes to long-term system growth.

Franchisees are smart but most have never sold a business before.

• Limited knowledge of selling a business and inconsistent views on what creates value.
• Generally, recognize that team stability helps a sale but are unsure how to prepare the business itself.
• Typical begins preparing less than one year before selling, which is often too late to influence valuation and salability.
• There is wide variation in the steps franchisees have taken or have failed to take to make their business sale-ready.
• Key concepts such as valuation, bankability, and deal readiness are not well understood.

This creates risk for both the franchisee and the franchisor when a location is in transition.

Industry data highlights the urgency of proactive resale planning:

• Sustaining the location:  74% of business owners expect to sell within 10 years, yet only 20–30% will successfully complete a sale.
• The Unexpected:  About half of owners are forced into an unexpected sale due to the 5Ds: Death, Divorce, Disability, Disagreement, Distress. These events can destabilize a franchise location and impact brand continuity.
• Brand Reputation:  76% of owners report dissatisfaction with their sale within one year, primarily due to lack of personal and business exit planning.  Only 5% were satisfied with the financial results.

Burned-out and determined to sell, we have observed strong franchise owners re-engaging, defering the sale and growing their business.  They enjoy running the business again.

• Business scaled past the economic tipping point. They are big enough.
• Owner shifted roles from managing everything and to regain their lifestyle.
• They often do not realize their current success.

They have a clearer vision and are motivated to grow and invest, understanding the path to a good resale outcome in the future.  A sellable business is a well run business.