Navigating Franchisor Approval: The Hidden Challenge of Franchise Resales
Your franchisor has more control over your sale than you might think. Here is how to navigate the approval process successfully.
Amanda Foster
Franchise Specialist
The Third Party You Cannot Ignore
When you sell a franchise business, you are not just dealing with a buyer—you are dealing with your franchisor. They have contractual rights that can make or break your deal.
Understanding Your Franchise Agreement
Before you even think about selling, pull out your franchise agreement and look for these key provisions:
**Right of First Refusal (ROFR):** Many franchisors can match any offer you receive and buy the business themselves. This can scare away buyers who do not want to waste time on due diligence.
**Transfer Fees:** These typically range from $5,000 to $50,000 and are your responsibility as the seller.
**Buyer Qualifications:** The franchisor must approve your buyer, and they often have stricter requirements than you might expect.
**Training Requirements:** Your buyer may need to complete initial training, which adds time and cost to the transaction.
The Approval Timeline
In my experience building and selling a portfolio of 18 franchise units, here is a realistic timeline:
Strategies That Work
Amanda Foster built a portfolio of 18 franchise units across two brands before selling to a family office. She specializes in multi-unit franchise transactions.