Preparing your franchise for resale isn’t just about listing it on the market; it’s about positioning it in the best possible light so you maximize value and attract the right buyer.
Regardless of whether your store is profitable, break-even, or losing money, the fundamentals of preparation remain consistent. The better your business looks and performs during the sale process, the faster you’ll find a buyer and the stronger your negotiating position will be.
Understand your starting point—are you profitable, break-even, or losing money? Your financial position will strongly influence your valuation, buyer pool, and negotiation strategy.
Profitable stores
A profitable location will always attract the strongest buyer interest. Your goal is to maintain or even elevate performance during the sale process. Buyers pay for consistency, proven cash flow, and a strong track record. Highlight year-over-year growth, efficient operations, clean financials, and systems that run smoothly with or without you present.
Break-even stores
If you’re break-even, focus on showing upside potential. Buyers in this category tend to be hands-on operators looking for a value opportunity. Demonstrate where small improvements like labor management, COGS control, marketing, or local partnerships could push the business into profitability. You’re selling opportunity, not perfection.
Losing-money stores
Even unprofitable businesses can sell, especially if the brand is strong, the territory is valuable, or the location is strategic. Your goal here is transparency, documentation, and a clear path to turnaround. Buyers must be able to see the “why” behind the losses and the “how” behind the fix. Avoid defensiveness and stick to facts. Many turnarounds are purchased because buyers believe they can operate better than the current owner.
Across all three scenarios, the message is the same: your store’s current performance is not the dealbreaker—your preparation is.
It’s important during this process that you maintain your store and run it as if it’s not for sale. One of the biggest mistakes franchisees make is mentally checking out once they decide to sell. Buyers will judge your business based on what they see today, not what it did last year. A store that looks tired, understaffed, or poorly maintained signals risk and effort—two things that reduce perceived value.
Be sure to maintain operational excellence. A well-run store does three things for you:
- Justifies your asking price
- Attracts serious buyers
- Makes the franchisor supportive of the transfer
Cleanliness, staffing levels, product quality, adherence to brand standards, and customer service should be at their peak. If a buyer walks the store and sees strong operations, they’ll trust the numbers that follow.
Push local store marketing harder than ever
When you’re selling your franchise, now is not the time to hold back on marketing—it’s the time to lean in. Why? Because momentum sells. A store with rising traffic and engaged customers tells buyers the business is healthy, the market is active, the brand has local relevance, and the store has future potential.
Invest in the basics:
- Community partnerships
- Sponsorships
- Social media engagement
- Local business outreach
- Direct-to-consumer campaigns
- CRM reactivation lists
Turning on the tap for LSM often delivers the fastest return and shows buyers they’re purchasing a business with energy, not stagnation.
How can you identify and engage potential buyers?
Finding the right buyer is crucial. Before you cast a wide net, start with the highest-probability groups.
- Existing franchisees
Your current franchise network is your most valuable buyer pool. They already understand the brand, the economics, the support model, and the operational expectations. For them, your store may represent expansion, territory protection, or consolidation. - Other franchise owners in the community
Owners of other franchises already understand the franchise model. They may be looking to diversify, seeking an opportunity for a spouse or adult child, or interested in acquiring distressed assets or underperforming stores. These individuals are often easier to work with because they’re seasoned operators with realistic expectations. - Business brokers
If you want wider exposure or need help packaging the deal, consider a broker. Brokers are motivated by commission, which means higher-priced listings get more attention. You must price your business properly to stay competitive. A good broker brings qualified buyers, manages negotiations, and keeps the deal moving, especially if you’re selling a break-even or losing store.
Notify your franchisor early in the process
Your franchisor should never be the last to know. Most franchise agreements require notification anyway, and franchisors hold the right to approve or deny buyers. They can also provide candidate referrals and assist with resale marketing. Keeping them informed ensures compliance and avoids delays.
How do you value your business?
Valuation can vary significantly depending on:
- Profitability
- Location
- Brand strength
- Market demand
- Condition of assets
- Growth potential
- Comparable store sales
Do not guess your valuation—defer to your accountant and your broker for fair market assessments.
Most businesses use:
- A multiple of EBITDA (profitable stores)
- Discounted cash flow
- Asset-based valuations (struggling stores)
- Market comparables
But remember the golden rule: your business is ultimately worth what a buyer is willing to pay. The goal of preparation is to maximize that number. Ask yourself whether the price seems reasonable—and whether you would pay it.
Preparing your franchise for resale is a strategic process, not a fire sale. Regardless of your store’s performance, the steps remain consistent: operate at your highest standards, increase visibility through local marketing, engage the right buyers, keep the franchisor informed, and price the business realistically. The effort you invest today directly impacts your sale price, your buyer pool, and the speed of the transaction.
