How to Sell a Franchise

Selling a franchise is relatively straightforward, as most properly executed legal Franchise Agreements spell out the conditions of sale or transfer of the entity in concise language. However, some Franchise Agreements either omit this language or forbid the sale altogether, in which case, you will need an experienced franchise attorney to help you execute a legal sale.

Things You'll Need

• Computer with Internet access

Instructions

1. Review your Franchise Agreements for the terms of transfer and sale, noting the stipulations concerning to whom and for how much the franchise can be sold.

2. Follow all necessary steps included in the Franchise agreement to prepare the sale of your Franchise to a third party, and verify your rights with the franchisor to avoid misunderstanding.

3. Disclose all enduring and transferable contractual obligations to prospective buyers in writing, a minimum of 10 days prior to intended sale.

4. Draft written notices of your intent to sell, and furnish all parties to the Franchise Agreement with copies at least 30 days prior to the intended sale date. Do this unless stipulations in the agreement allow for a shorter notification period.

5. Hire a good franchise attorney if you are bound to a Franchise Agreement without a transfer and sale clause, or with an order forbidding sale of the entity. With an attorney's help, you should be able to find some means of legally exiting the Franchise Agreement without losing your entire investment, or be able to sell out despite language to the contrary.

6. Prepare a sales package, including your assets, employees, asking price, disclosure materials and any other pertinent information required by the city and state in which your franchise operates.

7. Solicit the assistance of your franchisor, who may have prospective buyer contacts within your territory awaiting the opportunity.

8. Make a list of answers to potential questions of prospective buyers. Know your market, forecasts, and profit history. Prepare facts and figures before pitching your sale.

9. Offer training and set up assistance to court confidence in prospective buyers, highlighting those support items unique to your franchise opportunity.

Tips & Warnings

• Advertise your franchise opportunity with one of many online franchise sites, such as the non-profit International Franchise Association (see Resources below), or other for profit, fee-based services.

• Adhere to all federal regulations concerning franchise sale and formation.