In episode 57 of the Tell Us Your F’ing Story podcast by BDC Partners, Jane Garber Rosenzweig discusses franchise resales and the responsibilities of franchisors when a franchisee wants to exit.
She emphasises that franchisors should tightly manage the resale process. Allowing franchisees to handle the sale themselves can lead to delays and negatively impact the overall franchise network. Selecting the right buyer is crucial, as selling to someone unsuitable can harm brand reputation and service quality.
Jane highlights the importance of transparent accounting and proper documentation to ensure the business’s value and return on investment (ROI) are clear. New franchise laws also require franchisors to provide franchisees a reasonable opportunity to achieve ROI, making the process more accountable. She also addresses the ethical and legal implications of the “right of first refusal” clause. Misusing this clause for example, holding back approval to buy at a lower price can create unfair situations.
Jane recommends that both franchisors and franchisees establish clear systems and guidelines from the start, ensuring transparency, discipline, and support. A structured approach makes resales smoother, helps preserve the brand, and ensures fair outcomes for all parties involved.Looking to revitalise your franchise network?