Can You Sell a Franchise Business?

Business owners approaching an exit often ask Business Brokers of America, “Can you sell a franchise business?” when control over the business remains partly with a franchisor. 

Franchise sales differ from independent business transactions because contractual approval governs transfer rights. We work with Utah franchise owners to navigate these rules and complete compliant, market-ready transactions. 

Franchise systems permit resale in most cases, but success depends on preparation, documentation, and buyer qualification rather than unilateral owner choice.

What To Know Before Selling Your Franchise Business in Utah

Franchise agreements define whether and how a transfer may occur. Most agreements allow resale but require franchisor consent, proof of compliance, and buyer approval. Franchisors usually enforce these rules to protect their brand, not to restrict sales that would benefit everyone involved.  

If you’re considering selling your business in Utah, you’ll benefit from aligning operational readiness with market conditions. Financial statements should reflect accurate earnings, tax filings must remain current, and lease assignability must be confirmed. Confidentiality also matters because premature disclosure can disrupt employees and customers. Market timing, buyer screening, and documentation quality directly affect outcomes. 

Selling a Franchise Business Presents Some Specific Requirements

The key to understanding franchise businesses during a sale is recognizing that ownership entails obligations that continue through an approved transfer. A franchise operates under a license agreement and doesn’t own the franchisor’s brand. The franchisor retains control over trademarks, operating systems, approved vendors, and often territory boundaries.  

Franchise agreements typically include some mandatory conditions before the franchisor will approve a sale, such as:

• Transfer fees
• Buyer qualifications
• Training requirements
• Release provisions
• Meeting mandatory approval timelines

Additionally, the Federal Trade Commission (FTC) has enacted a disclosure rule that requires disclosure to prospective franchisees through a Franchise Disclosure Document (FDD) containing 23 standardized items. 

Item 17 specifically summarizes key provisions from the franchise agreement regarding renewal, termination, transfer (including sale/resale conditions, fees, buyer qualifications, and approval processes), and dispute resolution. 

The completed FDD must be delivered at least 14 calendar days before a prospective franchisee signs any binding agreement or makes any payment to the franchisor or an affiliate.

Selling a Franchise: Key Considerations

Franchise agreements typically include a transfer section that governs resale. We see key clauses that require the franchisor’s active consent to the sale, in accordance with brand standards that would generally apply to an initial franchise application. 

Even after the buyer and seller agree on terms, the deal cannot close until the franchisor and landlord approve assignments of the franchise and leases. Some franchise agreements include rights of first refusal or mandatory upgrades triggered by a sale. Sellers should plan for additional time and avoid committing to fixed closing dates prematurely.

Also, Utah business owners should confirm that the franchisor’s regulatory filings are up to date, as outdated disclosures can delay the buyer’s onboarding. This, in turn, can complicate your compliance under the sales agreement.

Financial performance also carries extra scrutiny. Franchisors often review royalty history, operational compliance, and customer metrics in addition to the proposed buyer’s qualifications. A clean operational record improves the chance of approval and your buyer’s confidence and commitment to the sale. 

Of course, sellers should review their contract provisions early to avoid pricing mistakes or unexpected costs. An experienced business broker can help outline the specific requirements of your agreement.

Qualified Brokers Know How To Sell a Franchise Business

Sellers should prepare accurate financial statements, confirm lease assignability, and verify that all licenses remain current. Franchisors often require buyers to sign updated franchise agreements that may differ from earlier terms.  

Marketing must follow brand rules. Many franchisors restrict public advertising or financial representations. Confidential marketing supported by qualified professionals protects compliance and credibility.

Following Essential Steps To Sell a Franchise Company

Most transactions follow a predictable sequence. Sellers notify the franchisor, assemble documentation, and engage qualified buyers. Buyer screening matters because franchisors evaluate financial capacity, background, and operational fit. Running buyer approval and deal negotiations in parallel prevents delays in the timeline.

Letters of intent should clearly condition closing on the franchisor’s approval and the lease transfer.  

Contact Business Brokers of America for Professional Guidance Before You List

So, can you sell a franchise business in Utah? It’s almost always possible if you comply with your franchise agreement.

If you are evaluating exit options, Business Brokers of America provides structured support from valuation through closing. Our experienced professionals coordinate approvals, documentation, and finding a buyer who meets your franchise transfer requirements. 

Call Business Brokers of America at (801) 935-8919 to discuss your situation and get started with marketing your business today.