How to sell your franchise
Selling a franchise is not the same as selling an independent business, the franchisor is part of the deal. Here is how it works.
How do you sell a franchise?
Get the business sale-ready
- Clean, verifiable financials, a buyer (and their accountant) will scrutinise them.
- Reduce owner-dependence, a business that runs without you is worth more and sells faster.
- Sort outstanding issues, lease, equipment condition, any compliance gaps.
- Check remaining term, buyers value the years left on the agreement and lease.
The franchisor's role
The franchisor typically must approve the buyer, though it cannot unreasonably withhold consent, and usually charges a transfer fee set out in your agreement. The incoming franchisee receives a disclosure document and has cooling-off rights, just as you did. Involve the franchisor early; a smooth transfer depends on their cooperation.
Pricing and completing the sale
Price on verified, normalised earnings, not hope, buyers and their accountants will test the numbers. Most sales complete through a business broker or directly, with a lawyer handling the contract and the franchisor's transfer documentation. Be ready to substantiate your figures with bank statements and BAS, the same evidence you would want as a buyer.
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Frequently asked questions
Can you sell a franchise business?
Yes. You find an approved buyer and transfer the business, but the franchisor usually has the right to approve the buyer and charges a transfer fee. The incoming franchisee receives a disclosure document and cooling-off rights. Check your agreement's transfer clause before listing.
How much does it cost to transfer a franchise?
Most agreements provide for a transfer fee payable to the franchisor when you sell, the amount is set out in your agreement. Factor it, plus broker and legal costs, into your net proceeds when pricing the sale.
How is a franchise sale priced?
Usually on a multiple of verified, normalised earnings, the same basis a buyer would use to value it. Price on numbers you can substantiate with bank statements and BAS, not projections, because the buyer's accountant will test them.
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