Selling a franchise business generally involves these steps:
- Prepare financials. Organize tax returns, P&L statements, and royalty records for at least 2–3 years.
- Get a valuation. Franchises are typically valued using a multiple of seller’s discretionary earnings (SDE), often 2–4x depending on the brand and industry.
- Notify the franchisor. Most franchise agreements require approval before a sale, plus possible transfer fees.
- Find qualified buyers. Use business brokers, franchise resale marketplaces, or the franchisor’s internal referral network.
- Vet buyers through franchisor approval. They’ll need to meet training and financial requirements.
- Negotiate and close. Draft a purchase agreement, transfer the franchise agreement, and handle lease or equipment transfers.
Consulting a business broker or attorney experienced in franchise transfers is strongly recommended.