Selling a franchise business in Florida is different from selling an independent company, because a third party sits at the closing table with you: the franchisor. Your franchise agreement almost certainly requires the franchisor’s written consent before you can transfer the business, and it usually sets a transfer fee, a right of first refusal, buyer qualification standards and a training requirement for the new owner. At South Florida Business Sales we sell franchised restaurants, service businesses and retail units across Palm Beach, Broward and Miami-Dade, and the deals that go smoothly are the ones where the seller understands these rules before the business ever goes to market.

Read Item 17 of your FDD and the transfer section of your agreement

Every franchisor is required by the FTC Franchise Rule (16 CFR Part 436) to disclose its transfer terms in Item 17 of the Franchise Disclosure Document: whether the franchisor must approve a transfer, the conditions for that approval, and whether it holds a right of first refusal to buy the unit itself. The FDD is a summary, though. The binding language is in your signed franchise agreement, so pull both documents and read the transfer, assignment and right-of-first-refusal sections before you set a price.

Selling a franchise business in Florida: what the franchisor will require

Most systems require the buyer to meet the same financial and experience standards as a new franchisee, complete the franchisor’s training program and sign either the current form of franchise agreement or an assignment of yours. Expect the franchisor to run a background and credit review on the buyer. Some brands also require the unit to be brought up to current image standards before a transfer, which can mean a remodel or new equipment. Building those costs into your asking price up front is far better than discovering them during due diligence.

Transfer fees and the right of first refusal

Transfer fees vary widely by brand. Some charge a flat amount, others a percentage of the initial franchise fee, and a few waive the fee when the buyer is an existing franchisee. Whoever pays it is negotiable between buyer and seller, so decide your position early. If your agreement contains a right of first refusal, the franchisor typically has a set window after you deliver a signed offer to match it and buy the unit on the same terms. That window does not usually kill a deal, but it adds days to the timeline and your buyer needs to know about it before they sign a letter of intent.

Timing and confidentiality

Franchise resales in South Florida often take longer than independent sales because franchisor approval runs in parallel with financing and lease assignment. Plan on notifying the franchisor once you have a qualified buyer under contract, not before you list, unless your agreement requires earlier notice. Many franchisors will also share your listing with their own resale program, which can bring qualified buyers already inside the system. Confidentiality still matters: your employees, landlord and customers should hear about the sale from you at the right time, not from a listing or a rumor. Our selling a business page covers how we market a listing without revealing the business name or address.

Pricing a franchise resale

Buyers of franchise units pay for the same thing they pay for in any business: seller’s discretionary earnings, a transferable lease and a clean transition. Royalty and marketing fund payments come out before SDE, so your recast needs to show earnings after those fees. Buyers also weigh how many years remain on the franchise agreement and on the lease, because a short remaining term reduces what a lender will finance. A confidential business valuation from a broker who has sold units in your brand will tell you where the unit sits against recent resales, not just against independent businesses in the same industry.

Getting ready to sell

Before you list, gather the franchise agreement, the current FDD, three years of tax returns and profit and loss statements, the lease and any amendments, the royalty statements and the franchisor’s most recent inspection reports. Clear any defaults, bring the unit up to image standards if required, and talk with your franchise business consultant about the transfer process and expected timeline. Our guide to preparing your business for sale walks through the rest of the checklist.

Thinking about selling a franchise unit in Palm Beach, Broward or Miami-Dade? Call John Diaz at South Florida Business Sales, 844-456-4647, for a free, confidential business valuation and a clear plan for the franchisor approval process. Hablamos español.