Franchise Resale

A franchise resale is the transfer of an existing, operating franchise location from the current franchisee (seller) to a new owner (buyer). Unlike opening a new franchise from scratch, a resale involves purchasing a business that already has revenue, customers, staff, and operational history. Resales are often attractive because they eliminate the 12-18 month ramp-up period typical of new locations and provide immediate cash flow. The franchise agreement's transfer provisions (disclosed in Item 17 of the FDD) govern the resale process, which typically requires franchisor approval, a transfer fee (often $5,000-25,000), and completion of the franchisor's training program. The resale market is fueled largely by retiring baby boomer franchisees, with an estimated $11.4 billion in franchise resales occurring annually.