Franchise Exit Strategies: Selling or Succession?

It’s no secret that franchising your way to business ownership offers many advantages for entrepreneurs. FranNet of DFW & Oklahoma has long preached that it’s easier than starting a new venture from scratch and often less risky than buying an established operation. These tenets have helped propel franchising into the mainstream, an industry that’s now bigger than ever. While most new franchisees are hyper-focused on launching their operations, they should still consider a key value proposition on the other end of the franchise agreement – an exit strategy.

As we’ve noted in this column before, when you buy a franchise, you’re making an asset-based investment. And investment assets are supposed to increase in value over time, providing a means for owners to build wealth and a secure future. With most franchise agreements operating under a 10-year contract, there’s plenty of time to develop a profitable exit strategy. The two most common are a sale or succession plan.


Selling Your Franchise

When you reach the end of the term with your franchisor, you should have the option to renew your franchise agreement or sell the business, which is your chance to cash out. The decision is up to you, but if you’re planning to sell your franchise, make sure you go about it according to what’s allowed in the franchise agreement. You’ll want the best price and fair terms, so here are some helpful things to know. If allowed, you may consider selling to another franchisee in the system looking to expand their operation. Communicate your plans internally and see if you generate any interest. If you’ve fulfilled all of your ownership requirements with the franchisor, you can sell the business on the open market. There are many resources you can utilize to get the word out, such as the popular site, Their networks will expose your offer to millions of potential candidates. You can sweeten the deal with a referral bonus, host an open house event, or utilize your own local business network to find an appropriate buyer. Based on your sales price, you may also want to consider your ability to offer seller-based financing, which includes the terms of your choosing.



When franchise owners pass their franchise down to a family member, it’s often referred to as a legacy business. For many, this was always the plan, so as to keep your hard-earned wealth benefiting your loved ones. It’s very common for the legacy recipient to have worked in the business themselves, which makes for a smooth transition of ownership. Once again, it’s imperative to stick to your franchise agreement, as franchisors typically reserve the right to approve the transfer (this may only apply if you do so before the end of your term). If you go this route, it’s highly advisable to have a franchise attorney develop an estate plan and handle the requisite paperwork regarding any financial, legal, and tax-related issues. If you need a recommendation for legal help, FranNet of DFW & Oklahoma would be happy to provide a qualified referral.


Whether you decide to sell your franchise or pass it down to a family member, these aren’t the only options available to you. So long as you’re in compliance with the terms spelled out in the franchise agreement, you can explore additional options for cashing out on your investment. Whatever you decide, an exit strategy should always reward you for your stewardship, hard work, and dedication to building a successful business.


Let’s Chat!

If you’d like to know more about franchise opportunities and ownership, please get in touch. FranNet of DFW & Oklahoma is uniquely qualified to match your potential with the possibilities that come from small business ownership through franchising. All you have to do is allow us to be your guide. Our no-cost, no-obligation consultations have helped hundreds of entrepreneurs in North Texas and Oklahoma secure a future that belongs to them and them alone. If you’d like to get started on your own entrepreneurial journey, we’d love to introduce you to a whole new world of possibilities through franchise ownership.

Jul 25, 2023