If you own a franchise fit you know that there are stipulations when you sell your franchise to someone else. The new franchisee will have to qualify with the main franchise company prior to closing of the sale. The Franchisor will be concerned that the new franchisee coming into the system is not a competitor and can maintain your business or increase sales. The Franchisor will need to screen the new franchisee and make sure they are competent enough to run the business and the new franchisee will also have to pass training.

If the new franchise buyer fails to pass training the Franchisor cannot allow the new franchisee into the system and the old franchisee; that is you, is still liable under the franchise agreement. Too often franchisees will try to sell their franchised business to another party who is either incompetent, a competitor or problematic to the franchise system. Just because a franchise buyer has a lot of money to spend to buy your franchise does not mean the Franchisor cares to have them in the franchise system.

After spending 20 years in the franchise business it became apparent to me that franchisees who were leaving the company no longer care about what happened to the company but were only self interested in the amount of money they could get during the franchise sale. Often a franchisee leaving the system would complain because I would not allow the new franchise buyer to come into my system.

You see it was my company and it took a long time to build it up and I did not want scoundrels representing my brand name. Obviously you can understand this. And from the franchisee’s perspective I also understood that they wanted to make the most amount of money possible to get on with their life or their next business adventure. Either way you should consider all this in 2006 if you are considering selling your franchised business.