Franchise Exit Strategy: Selling Your Franchise
Plan your exit from day one. Decisions you make in year 1 shape what you can sell in year 7.
The decisions you make in the first three years of franchise ownership shape what you can sell five years later. Plan your exit on day one, not day one of year seven.
What Determines Resale Value
Consistent revenue trend, documented systems and SOPs, strong management team that will transfer, clean books, long lease, and a healthy franchise relationship. Buyers pay premium for de-risked businesses.
Typical Multiples
Single-unit franchises sell at 2.0–3.5x SDE (seller's discretionary earnings). Multi-unit operations sell at 4.0–7.0x EBITDA. Category and brand reputation matter.
The Franchisor's Role
Franchisors typically retain right of first refusal and approval of the buyer. Engage them early in your sale process — surprised franchisors slow deals.
Tax Planning
How you structured the entity at purchase shapes how the sale is taxed. Consult a tax advisor 12+ months before listing the business.
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