Franchise Resales

Franchise Resales

In our most recent survey, it was quite obvious that the sale of existing franchises makes up a very small portion of sales. The sale of new franchises is almost non-existent. While it’s the sale of both that is of concern, the fact that the sale of existing franchises is so minimal should be of great concern.

Let’s face it, franchising is here to stay and, unfortunately, is slowly replacing many small businesses. Whether it’s fast food or a brand new concept, franchised small businesses are taking over. And, although they may be replacing many small businesses such as the fast food category, they are also bringing many new concepts to small business.

Most franchises are small businesses individually owned and operated. They are the small businesses of the future and business brokers should be handling the resales, if not the sale of new ones. The resale of franchises is no different than the sale of any small business. Yes, you have to deal with the approval of the franchisor, but in most cases, the lease is easier to transfer and other details may also be easier.

We strongly urge the main street broker to increase their efforts to handle the resale of franchises. Many of the owners have been in business for some time and are ready to move on. Our most recent survey reported that franchise resales represented less than 12 percent of their sales. That’s not nearly enough.

Have you had any franchise resales since November 2011?

We need your help in adding new franchise pricing data and maintaining updated information on our current franchise list. We have a very simple form which gives us sufficient financial information to create a Rule of Thumb.

We would be most appreciative if you would review your sales since November 2011 and complete the online form for all of your franchise resales. You will always be able to obtain a current list by emailing me personally.

To contribute franchise resale information, please use our online form.

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