How Franchises Can Turn Resale into Revenue

In franchising, “resale” can sometimes be seen as a negative. People assume a business is struggling or that something went wrong. But more often than not, resales happen for normal, even positive reasons, such as owners retiring, moving on, or just deciding it’s time for a change. At Moran Family of Brands, we see resales as a vital part of a healthy operation, not a red flag. When done right, a resale program helps outgoing franchisees get the return they’ve earned, brings new energy into the brand, and ensures long-term continuity for our customers.

Here's what we’ve learned about building a successful resale program:

The power of early engagement and planning

Early engagement is everything when it comes to resales. Waiting until the last minute to start the conversation can lead to rushed decisions, missed opportunities, and tougher transitions. That’s why you should take a proactive approach and reach out to franchisees well before their agreements expire to talk about what’s next.

Whether they’re thinking about renewing or ready to sell, it’s important they have time to make the right decision. Starting the conversation early gives them room to prepare, evaluate their options, and find the right buyer. It also allows you to create a transition plan that helps protect the value of the business they’ve worked hard to build.

Valuation and pricing guidance

You need to help franchisees understand what their business is worth. Too often, sellers either overestimate based on emotion or undervalue their operation just to make a quick exit.

Work with franchisees to ensure they look at the full picture including profitability, market conditions, location, and strength of the brand. From there, you can bring in trusted advisors to help evaluate financials and compare to similar businesses.

It’s also important to understand how lenders evaluate small business acquisitions. If you don’t consider this early on, you can get far down the road and find out the resale can’t be funded. Pricing needs to align not only with market value but also with lending criteria to ensure a successful transaction.

When the price is right, deals move faster and smoother. It attracts serious buyers and leads to more productive negotiations. Just as important, it helps the outgoing franchisee feel good about the deal.

Lead generation and candidate sourcing

When it comes to finding the right buyer, one of the most effective places to start is within your own system. Franchisees often know people who are already familiar with the brand or looking to get into business ownership. Some are even existing multi-unit owners looking to grow. Franchisors should also use their own networks to help source buyers. Franchise broker groups and consultants can be great resources in finding qualified candidates for resales.

Make sure you’re using every available channel to reach strong candidates. This includes online franchise portals, targeted digital ads, and industry publications. Even if someone isn’t actively searching, the right message at the right time can plant a seed of interest.

Buyer qualification and support

Finding a buyer is just the first step. Ensuring they’re the right fit is where the real work begins. Resale candidates should go through a similar process as new franchisees, helping to identify which potential buyers are not only financially qualified but understand the business and share your values.

Spend time educating them on your system – what to expect, how you operate, and what it takes to succeed. Look closely at their background, financials, and long-term goals. That due diligence matters because it protects both the outgoing franchisee and the reputation of the brand.

Negotiation closing assistance

By the time you reach the negotiation stage, a lot of work has already gone into the deal, but franchisor support is still crucial. Stay involved to help both the seller and buyer navigate the process, secure financing if needed, and work through the final details.

Once the sale is closed, the incoming owner should be treated just like a new franchisee. They should go through the full onboarding and training process to ensure they’re set up for success from day one. That consistency in support is what helps transitions go smoothly, and it’s what keeps the business strong moving forward.

Pete Baldine is president of Moran Family of Brands, a leading franchisor of automotive services.