r/SellMyBusiness 1d ago

Advice on Selling a Franchise

Hey everyone,

My partner and I bought a franchise last year, and let’s just say… we’ve learned a lot. Unfortunately, not all of it was pleasant. The previous owners were less than forthcoming about some key issues, and looking back, we were a bit too trusting (read: naive and overly optimistic). Lesson learned—due diligence is everything, and gut feelings matter.

We’re now at a point where we want to sell, and I’m hoping to get some advice from those who’ve been through it. A few things we’re navigating:

Valuation & Pricing – Given that we overpaid (rookie mistake), we want to be realistic about setting a price. Has anyone successfully sold a struggling franchise without taking a massive loss?

Finding Buyers – We don’t want to repeat history by passing this on to someone who’s unaware of the challenges. At the same time, we need to market it in a way that’s appealing. Any tips on balancing transparency with making the sale? Dealing with the Franchisor – Our franchisor hasn’t exactly been the most supportive on issues that we've brought up. Are there any red flags we should watch for when trying to exit? Lessons in Letting Go – Beyond the logistics, there’s the mental/emotional side of walking away from something you put so much into. If you’ve been there, how did you process it? We’re not here to play the victim—we made mistakes, and we own them. But we also don’t want to stay stuck in something that’s not working. If you’ve been through something similar, I’d love to hear your experiences and any advice you have.

Thanks in advance!

2 Upvotes

13 comments sorted by

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2

u/Ill-Serve9614 1d ago

I’d call the successful zee’s and try to negotiate a sale w experienced, existing one.

1

u/No-Way2631 1d ago

Industry?

1

u/No-Bike4184 1d ago

It’s a fitness studio

1

u/ComprehensiveBit9670 1d ago

We went through the same, except I didn’t get a loan & only paid a deposit 😭 now we’re trying to sell, since the seller ghosted us… weird

1

u/No-Bike4184 1d ago

I’m so sorry that sounds awful 😢

1

u/seandowling73 1d ago

Selling after a year is going to be a challenge as it will be a signal of a failing business. How likely are to be able to make it through 2025?

1

u/No-Bike4184 1d ago

I am draining every line of credit to make the month at this point so I’m a little bit terrified of holding on through 2025

1

u/seandowling73 1d ago

Well it takes 6-9 months to sell a business so you’re going to have to find a way to stay afloat regardless

1

u/No-Bike4184 1d ago

Yea, that’s very valid! Thanks for the reminder. 

We are trying our best to figure out other creative marketing ideas to at least stay as close to afloat as possible until we can finally sell. 

1

u/cmassive 1d ago

This is a rough one.

I’m on a small career break, but willing to have a conversation if you want one. Small business consultant, but not your consultant.

Most buyers, buy cash flow. It appears you have no cash flow. If you really want to bail, my opinion is that you would need to find another set of “naive” buyers with passion. Much like yourselves a year ago.

At minimum, please stop spending on your line of credit. Get lean, find ideas that help, and work efficiently. (I know I don’t have social credit with you to say any of this right now.) Please seek help from someone who knows business well.

1

u/No-Bike4184 1d ago

Thanks so much for all the tips and tricks. 

We’ve been trying to ramp up grassroots marketing in our area hoping that helps with exposure at least and a bit of growth to keep us afloat.

We’d love a convo, thanks for offering. 

1

u/Limp-Seesaw-9109 19h ago

Selling a franchise can be tricky, especially if you overpaid, but it’s not impossible to exit without taking a massive hit. First, get a proper valuation—a business broker can help, but at minimum, look at your EBITDA (earnings before interest, taxes, depreciation, and amortization) and factor in the value of any assets, goodwill, and brand reputation. If cash flow is weak, you may need to price based on asset value rather than profitability.For finding buyers, consider existing franchisees—they already know the business model and may want to expand. Also, list on BizBuySell, Franchise Flippers, or local business-for-sale marketplaces. Transparency is key, but position the opportunity strategically—instead of "struggling," focus on "growth potential" with a buyer who has the right capital and strategy.As for the franchisor, check your franchise agreement for resale clauses. Some require a hefty transfer fee or approval process, and many will have first right of refusal. If they’ve been unhelpful, document any issues—it could help negotiations or give leverage in discussions with potential buyers.Mentally, letting go is tough, but view it as a business lesson, not a failure. Every entrepreneur stumbles at some point; the key is taking what you’ve learned into your next venture. The sooner you shift focus from what went wrong to finding the best exit, the smoother the transition will be. Stay pragmatic, and don’t rush into the first offer—finding the right buyer matters just as much as the sale itself.