Franchise
Franchise businesses change hands under rules the franchisor sets, which affects the price, the buyer, the timing and the transfer fees. Owners selling a location, buyers evaluating a resale and founders thinking of franchising all face questions an independent business does not. We advise all three, independently of any franchisor.
How the money works
- The franchisor must approve the buyer, which narrows the pool and lengthens the process
- Royalties, marketing fees and mandatory suppliers reduce the margin buyers can pay for
- Remaining term and renewal rights on the franchise agreement cap the value
- Multi-unit operators often command better pricing and financing than single locations
The moves we make
- Value the location on earnings after franchise fees and a market wage for the operator
- Start the franchisor approval and transfer process early so it does not stall the sale
- Negotiate renewal and transfer terms before listing where the agreement allows
- Compare resale pricing with independent businesses so both sides see the real trade
Selling a franchise location
A franchise resale runs on two tracks: the commercial deal between you and the buyer, and the franchisor's approval and transfer process. The second can take longer than the first and includes training, transfer fees and sometimes a required refresh of the premises. We map the franchisor's requirements at the start, price the location on normalised earnings after royalties and fees and market it to buyers the franchisor is likely to approve. Your franchise lawyer handles the agreement and the transfer documents.
Buying a resale
A resale gives you a location with real financials, trained staff and an approved site, which is why many buyers in BC prefer it to a new territory. It also gives you a seller with reasons to leave, a lease and an agreement with a finite term. We value the location independently, read the disclosure document and agreement with your lawyer for business risk, model the unit economics after every fee and check the remaining term and renewal rights before you sign a letter of intent.
Franchising your own business
Owners of successful multi-location businesses in BC sometimes consider franchising as a growth and exit strategy. It can work when the model is simple, documented and profitable for an operator paying royalties, and it fails when the business depends on the founder's judgment at every location. We run a feasibility study on the economics for both franchisor and franchisee before you spend money on legal documents and a system manual. Franchise law, disclosure documents and agreements belong with a franchise lawyer.
Questions from franchise owners
How is a franchise location valued?
On normalised earnings after royalties, marketing fees and a market wage for the operator, with the remaining term, renewal rights and the brand's strength shaping the multiple.
Can the franchisor block my sale?
Most agreements require franchisor approval of the buyer and give the franchisor a right of first refusal. Starting the process early and choosing buyers who meet their criteria avoids surprises.
Do you receive anything from franchisors?
No. We are paid only by the client we advise, which is what makes the advice independent. If a system or a resale does not make sense, we say so.
Start with a confidential conversation.
Tell Ali where the business is and what you want to happen next. You leave with a straight read on value, timing and the two or three moves that matter, whether or not we work together.