Franchise resales are a critical component of sustaining a healthy and thriving franchise system, yet they’re often misunderstood. Misconceptions about resales can lead to missed opportunities, unnecessary hesitation, and even a reluctance to embrace this essential aspect of franchise growth. The truth is, resales are not just about passing the torch—they're about building momentum and ensuring the long-term success of franchise brands.
In this article, we’ll debunk three of the most common myths about franchise resales. From the idea that resales signal failure to the notion that they drain franchisor resources, we’ll set the record straight and uncover the value that resales bring to franchise systems. Let’s dive in and separate fact from fiction.
Myth #1: Resales Only Happen When Franchisees Fail
The Misconception
One of the most pervasive myths about franchise resales is the belief that they only occur when franchisees or the franchise system fail. This assumption suggests that a resale is a last resort—a sign of trouble or poor performance.
The Truth
The reality is that most franchise resales are driven by personal circumstances, not failure. Many franchisees sell their businesses for reasons unrelated to performance, such as:
In fact, many resales occur when the business is thriving, offering buyers a turnkey opportunity to step into a well-established operation with proven cash flow and an existing customer base.
Supporting Example
Consider a franchisee who decided to sell their thriving unit to retire. The business, with strong sales and a loyal customer base, was purchased by a motivated new owner who leveraged its success to grow even further. This transition not only ensured continuity for the franchise but also reinforced the strength of the brand in the local market.
A strong resale market is a sign of a healthy franchise system—one that offers opportunities for franchisees to exit successfully while attracting new talent to drive future growth.
Myth #2: New Franchisees and Resale Buyers Are the Same
The Misconception
Another common myth is that resale buyers are no different from new franchisees who start from scratch. This misconception overlooks the unique motivations and priorities of buyers seeking established units.
The Truth
Resale buyers have distinct preferences that set them apart from new franchisees:
Supporting Example
Imagine a buyer evaluating two options: purchasing an established restaurant with a loyal customer base or opening a new location in an untested market. The buyer chooses the resale because it offers immediate cash flow, established processes, and the opportunity to build on existing success. This decision not only benefits the buyer but also ensures the franchise’s continuity in that market.
Understanding the distinct motivations of resale buyers is essential for franchisors to effectively market opportunities and attract the right candidates.
Myth #3: Resales Drain Franchisor Resources
The Misconception
Some franchisors view resales as a drain on their resources, believing that the process diverts time and energy from new franchise development. This myth can lead to a lack of proactive planning and support for resales.
The Truth
With the right partner, franchise resales can fuel growth, not hinder it. Here’s how:
Supporting Example
A franchisor partnered with professional brokers to streamline its resale process. The result? Not only were units transitioned seamlessly to new owners, but the franchise also avoided closures, preserved market share, and showcased a thriving resale-friendly system to prospective franchisees. This proactive approach strengthened the franchise’s reputation and contributed to net unit growth.
Rather than draining resources, resales—when managed effectively—become a valuable tool for sustaining and growing franchise systems.
Franchise resales are often misunderstood, but debunking these common misconceptions reveals their true value. Here’s what we’ve learned:
At We Sell Restaurants, we specialize in turning franchise resales into success stories. Whether you’re a franchisor or franchisee, embracing resales as an opportunity rather than a challenge can drive growth, strengthen brand reputation, and keep the American Dream alive.
Ready to explore the value of franchise resales for your system? Contact us today to learn how we can help you navigate the process with confidence and success.