What is a franchise resale?
Franchise Resale · reventa de franquicia · إعادة بيع الامتياز · 特许经营转让
A franchise resale is the purchase of an existing, operating franchise unit from its current owner rather than opening a new one. Buyers get trading history, staff and cash flow from day one — priced accordingly — and the transfer requires the franchisor's approval under the franchise agreement.
Resales are a large, quiet market: existing units change hands through brokers and marketplaces with median small-business sale prices in the hundreds of thousands of dollars. Diligence focuses on the unit's real books, the remaining agreement term, and any required refurbishment on transfer.
In practice
A resale involves the seller, the buyer and the franchisor, which must approve the buyer much as it would a new franchisee. The buyer usually completes the franchisor's application and training, may be asked to sign the current form of agreement, and a transfer fee often applies. Under the US FTC Franchise Rule, an existing franchisee selling only its own outlet is not a franchise seller. The FTC also notes that a franchisor may give you the actual records of an existing outlet you are considering buying.
Not to be confused with
A resale is buying an operating unit from its franchisee; a new franchise is a unit you build from scratch. When the franchisor sells one of its company-owned units, the deal is usually called refranchising. A transfer is the approval process within the franchise agreement that makes a resale possible.
What to check before you sign
- Does the franchisor hold a right of first refusal that lets it match your offer and buy the unit instead?
- Will you take over the seller's remaining term or sign the current agreement, possibly with different royalties and renovation requirements?
- How many owners has this outlet had, and can you contact earlier owners about why they sold?
Questions to raise with the franchisor and your own adviser — general information, not legal advice. Rules differ by country.
📌 Also sourced from
- 16 CFR 436.1 — Definitions (Legal Information Institute) ↗ — inPractice: 'franchise seller' does not include existing franchisees who sell only their own outlet
- 16 CFR 436.5 — Disclosure items (Legal Information Institute) ↗ — inPractice: Item 19 permits providing the actual records of an existing outlet being purchased; Item 6 lists transfer fees; notToConfuse and checks[0]: Item 17 covers transfer by franchisee, franchisor approval, conditions for approval and franchisor's right of first refusal
- FTC — A Consumer's Guide to Buying a Franchise ↗ — checks[2]: several owners in a short time may signal problems; contact as many previous owners as possible
Related terms
See it in practice
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