Selling Your Franchise (Transfer)

This page covers how a franchise transfer works in practice: the franchisor's right of first refusal, the buyer approval process, the transfer fee and financial close-out, what changes in the system at closing, and what happens if the buyer is not approved. This page summarizes the Franchise Transfer Policy, which governs. Your franchise is a business, and businesses get sold: but the franchise agreement runs between you and the franchisor, and the franchisor has a say in who the next operator is.

Check the right of first refusal first

Before you market the business to anyone, check the agreement's right-of-first-refusal clause. The franchisor typically holds a right of first refusal on the sale: you present the bona fide offer, or the proposed terms, and the franchisor gets a window to match it. This is not a formality; skipping it can void the transfer. Know the window, know what triggers it, and start the clock with written notice, not a phone call.

The approval process

The buyer is not buying your shop the way they would buy an independent business. They are applying to become a franchisee, and the franchisor approves or denies them under the same eligibility standards you met: the Franchise Eligibility & Approval Policy. The policy sets a 45-day approval clock once the application is complete. Your job in this phase

• Give the buyer everything early. Financials, the agreement, the fee schedule, the standards. A buyer who discovers the royalty structure during due diligence instead of from you is a buyer getting nervous.
• Keep operating normally. The shop does not get to coast while it is for sale. Standards compliance, reporting, and fee currency all continue. A shop in visible decline during the sale process invites a lower offer and a harder approval.
• Do not promise what is not yours. You can sell your business; you cannot sell the franchise rights: those are the franchisor's to grant. Any purchase agreement should be contingent on franchisor approval. A buyer who "didn't know" approval was required is a deal that dies expensively.

The transfer fee and the money

The agreement's fee schedule includes a transfer fee, in the amount stated there, typically paid at closing. Beyond the fee, the financial close-out has to be exact

• All royalties and fund contributions current through the transfer date.
• A final Gross Sales report filed for the stub period: the discipline in Reporting Your Gross Sales applies to partial periods too.
• Any audit findings resolved.

The seller's books close clean; the buyer's start clean. A stub-period reporting dispute discovered six months later, with the seller gone, is everyone's problem and nobody's responsibility: which is why it gets settled at closing.

What changes in the system

On transfer, the records move

1. The franchise record points to the new owner's login.
2. Your owner login is deactivated: the same-day rule in Your Staff: Users, Roles, and Access (Your Staff: Users, Roles, and Access). A former owner with active access is the worst version of the departed-employee problem.
3. The buyer completes their own Stripe onboarding for the shop. Bank links do not transfer; see Connecting Your Bank (Stripe Onboarding) (Connecting Your Bank (Stripe Onboarding)).

The shop itself continues; the business continues; the person changes. The agreement record may be replaced or assigned depending on the structure: confirm with the franchisor which it is, because it determines whose signature is on what going forward.

If the buyer is not approved

It happens. The buyer does not meet the financial requirements, does not clear the eligibility review, or the franchisor exercises its right of first refusal and buys the business itself. Have the contingency in your sale agreement before you need it: what happens to deposits, who bears the transfer-application costs, and how long the window stays open for a second buyer. The 45-day clock runs per application: a second buyer means a second clock.