Of Course You Can’t Sell The Franchise To Just Anyone. Here’s Why!

I don’t remember (and it doesn’t matter) which major news publication this week ran an article about the popularity of franchises in a recession, but there was one sentence in the article that gave me a chuckle. Often times, when the media print articles that put a positive spin on franchising, they include a zinger to caution people. And that’s okay, because franchising isn’t for everyone, and it’s not a guaranteed path to success. But sometimes these zingers are obvious.

Like this one: “Often (franchise) agreements are written so you can’t even sell the franchise operation without the approval from the franchise company.”

Well, duh!

That’s a good thing, isn’t it?

Who Do You Want To Sell To?

You’re a franchisee, you operate your business for a dozen years, you make some money and decide–for whatever reason–that you’re going to sell the business. Does it make sense for you to sell the business to just anyone?

It would be in the best interest of everyone, including the other franchisees, the new franchisee who is buying your business, and. of course, the franchisor, to sell the business to someone who qualifies!

The franchisor and the other franchisees want to be sure that the new operator will be a quality individual who not only can afford the business but understands what it will take to succeed. The buying franchisee also wants to know that he or she has the confidence of the franchisor and the other franchisees in the network.

And hey, if you’re selling the business and expecting a payout over time, you want to be sure you’re getting a qualified candidate and not someone who will run the business into the ground in a few months and never pay you! The franchisor will help you determine if your candidate is qualified.

This just makes sense, doesn’t it?

Why Call Attention To This?

So why run this flag up the pole to call attention to what is perceived to be the downside of franchising? It’s not!

And I don’t think there’s any “often” about it. I don’t know of any franchise agreement that says a franchisee can sell the business to anyone without the franchisor’s approval. In fact, I’d be afraid to buy into a network like that. Wouldn’t you?

Categorised in: Buy a Franchise

This post was written by Dr. John Hayes