Q.

Can I sell my franchise if things don’t work out as planned?

Author: Brain Duckett

answered by Brain Duckett

Chairman of The Franchising Centre

Nearly all franchise agreements give the franchisee the right to sell their business, though depending on the circumstances they may not get back as much as they have invested.

There is also a caveat that the purchaser must meet the franchisor’s usual profile in terms of knowledge, skills, attitude and financial resources. They must therefore be formally approved by the franchisor, some of whom have clear policies and procedures for dealing with resales, which should be detailed in the franchise operations manual.

There are various reasons why things may not work out as planned, ranging from not being suited to running a business; personal domestic or health problems; or simply that the business didn’t thrive in that territory.

Looking at the subject in a more positive light, the good news is you can also sell your franchise if things work out as well as, or even better than, expected. This means you could make a considerable capital gain on your investment.

It’s also worth pointing out that the original suggestion of a resale may come from the franchisor not the franchisee. If things aren’t working out and could potentially escalate to business failure or termination, it’s better for all concerned if an amicable resale can be achieved.

Brian Duckett is chairman of The Franchising Centre, part of the world’s largest network of specialist franchise consultants.

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