The Exit Plan: Resale Programs Protect Stores, Franchisees, And System Growth

It wasn’t that long ago that Pete Baldine would take the podium at a franchising conference, begin to talk about the importance of having an effective franchise resale program, and meet a room full of blank stares.

The looks on the faces of some brand representatives weren’t necessarily due to a lack of interest; they were expressions of genuine puzzlement.

At the time, “franchisors weren’t very involved in resales,” says Baldine, president of Moran Family of Brands, which specializes in the automotive aftermarket industry with nearly 200 locations of Mr. Transmission, Milex Complete Auto Care, Turbo Tint, Mister Transmission of Canada, and others.

“I would say a lot of the attitude was, ‘If a franchisee wants to sell, we just tell them to list it with a local broker, and it’s their responsibility to get it sold. We just have to approve the candidate,’” Baldine says. However, he warned his fellow franchisors against such a passive approach. “There are a lot of pitfalls in that lack of strategy,” he says.

If anything, the team at Moran Family of Brands has learned there’s a huge upside when franchisors are proactively involved in ownership transfers.

Franchisees exit franchise systems for a host of reasons. They retire, get sick, or have other changes in their personal lives. For franchisors, the North Star is preventing disruptions. Resale programs help facilitate seamless ownership transfers, which can prevent business closures, protect revenue streams, and maintain customer relationships.

Well-managed exits are essential to franchisors’ long-term stability, growth, and enterprise value. Moran Family of Brands instituted its resale program two decades ago. Today, roughly 60% of franchises have formal resale programs, according to a 2024 survey by Franchise Update Media.

When franchisors help connect sellers and buyers and stay actively involved in the process, everybody wins, Baldine says.

Staying open

Moran Family of Brands got its start in 1990. Roughly 30% of its franchisees have been in the system for 20 years or more, and 16% have been in the network for 30 years or more. Over the decades, the company’s resale program has been beefed up to meet the needs of its franchise owners.

“If you don’t have a resale program in a system like that, where franchisees are aging out, then you’re going to lose stores,” Baldine says. “Everybody talks about how many new ones you’ve opened. But in an older system, your resales can be just as important as your new sales.”

Some franchisees don’t have a succession plan or an exit strategy. They don’t know where to begin when it comes to selling their business. Left unmonitored, some franchisees might decide not to renew their lease and simply shut down, Baldine says.

Moran Family of Brands keeps tabs on which franchise agreements are about to expire and contacts franchisees at least a year in advance to inquire about their plans. If the franchisee wants to sell, the company sends them a resale package. Then, Moran Family of Brands basically does what a local business broker would do. The franchisee signs a listing agreement with the company.

“We analyze their financial statements and tax returns, and we advise them, based on their financial performance, about the range that we believe they can sell the business for,” Baldine says. “It’s up to them to actually place the final value on it, but we help them with that process. We use the same valuation formulas that the Small Business Administration is going to use to value the business. That helps tremendously when the buyer goes to the SBA to get funded.”

The company vets potential buyers to make sure they are well qualified and a good fit for the network’s culture. The franchisor then helps negotiate the deal. “We go to the closing to make sure that there’s a smooth transition,” Baldine says. From there, the new buyer goes through training set up by the company.

With a resale program, “you have the opportunity, as the franchisor, to bring in a new franchisee, and you’re able to keep the store open,” Baldine says. “You’re also helping your franchisee. Over the course of their agreement, they built equity in that business. Sometimes, they don’t know how to get that equity out. As the franchisor, when you get involved in that process, you’re helping your franchisee get the equity out that they worked so hard to build. At the same time, you’re saving the revenue stream for you as the franchisor.”

A successful resale program can be a key selling point for potential franchisees who are on the fence. Many candidates have questions: How do I get out of the franchise if I want to? What if the business isn’t going well? What if something happens and I need to move?

“All those questions get asked because they want to know how they exit. And, if the franchisor doesn’t have a strong resale program and the ability to help them exit, then they’re less likely to move forward. That’s why I talk to candidates on discovery day about our resale process,” Baldine says. “I want the franchisee to understand that whole life cycle. Get in, build your business, grow your business, your money, and then count on the fact that your franchisor has a solid resale program to help you exit the business when you decide it’s your time.”

New franchisees

Unleashed Brands is a youth enrichment franchise platform with a portfolio made up of Urban Air Adventure Park, The Little Gym, Sylvan Learning, Snapology, Class 101, Premier Martial Arts, and Water Wings Swim School. With 1,400 locations and seven brands, turnover is inevitable as it is in all franchise systems.

“The difference is whether that turnover is handled strategically or left to chance,” says Paige Robinson Dosch, vice president of franchise resales.

A formal resale program “protects the enterprise value of the franchisor while simultaneously building and preserving value for franchisees,” she says. “It creates structure, continuity, and transparency as assets change hands.” That structure can smooth the path for new franchisees.

Resales offer financial visibility. That can make buying established units, especially those with track records that can be pored over, an attractive option for investors. It’s often a differentiator, Dosch says.

“When candidates step into a system with existing cash-flowing assets, they gain real visibility into what’s possible,” she says. “There’s history there: established brand presence, operating data, community trust. And that foundation materially reduces uncertainty.

“In our system, we have brands with deep roots, long-standing customer loyalty, and proven performance,” she continues. “That combination of brand equity and existing cash flow is a powerful differentiator. It’s a meaningful advantage for franchisees evaluating growth, expansion, or entry into the platform.”

Recently, Unleashed launched a retooled resale program that supports franchisees in all of its seven brands. Franchise operators are made aware when existing units in the portfolio are about to go on the market.

“Having clear visibility into actionable opportunities already within the system has been a significant advantage,” Dosch says. “I’m frequently asked by an existing owner what else may be available for acquisition, whether within their brand or across another concept. That transparency creates a pathway for multi-unit, multi-brand growth, in our case, all within the same ecosystem, shared infrastructure, and trusted platform.”

While franchise resale programs aren’t new, they are becoming more of a focus for franchisors in this economic climate. “We’re in a unique timeline where understanding exactly how a business performs becomes very important to the investor, to the lender, and to the franchisor,” Dosch says. “Everyone wants to focus on how many units you awarded and how many units you’re opening, but let’s not forget that the existing unit health is paramount to the health of the organization.”

Connective tissue

Firehouse Subs was founded by a pair of brothers, Chris and Robin Sorensen, in 1994. A year later, it became a franchise and now has nearly 1,500 locations across the U.S. and Canada. The brand has a robust resale system in place to help franchisees who are looking to exit the system.

“There are different reasons franchisees would decide to sell or transition out. We’re happy to help the existing franchisees transition out and also welcome the new franchisees and help them to be successful,” says Theo Camurca, vice president of operations.

When it comes to resale programs, there are good ones, and there are great ones, says Abhi Patro, director of franchising. What sets Firehouse Subs’ program apart, he adds, is its transparent process, strong cross-functional collaboration, diligence, and dedicated onboarding team for new buyers.

“Typically, in resale transactions, several different internal and external parties are involved,” Patro says. “It’s not just the buyer and the seller. You’ve got lenders, vendors, attorneys, landlords, operations, finance, real estate, training, onboarding. The existence of a function that acts as a focal point and the connective tissue across all of these different entities and closely collaborates with field operations is what makes a seamless ownership change.”

Firehouse Subs’ business development team is always on the lookout for new buyers, using brokers, referrals, and conferences to fish for leads.

Both of Firehouse Subs’ founders were firefighters. The franchise offers financial incentives to attract first responders and military veterans, Camurca says. “They’re normally very disciplined, very methodical, and normally turn into great operators. So, this is definitely a natural fit for us,” he says.

For current franchisees interested in expanding, the brand conducts rigorous analyses of their existing businesses to make sure they aren’t biting off more than they can chew, operationally and financially, Patro says. If the buyer needs an SBA loan, the franchisor is there to assist in the process. Training on franchise operations is provided for new buyers.

“Any successful franchise resale program will have a roster of partnerships at your disposal and resources,” Patro says, “whether it’s a list of financial lenders with preferred terms to fund your purchase, brokers if you want to sell your business, third-party vendors offering valuation support to help you come up with a target sale price, a training and onboarding team, or a real estate team. We have a dedicated real estate team that is really involved with reviewing lease assignments and helping buyers with conversations with landlords.”

Once the deal is buttoned up, a representative from Firehouse’s field operations team will be on hand to oversee the handover of the keys and communicate with employees, Patro says. Firehouse’s process is meant to ensure that the transaction is the right move for the franchise, the seller, and the buyer, he says.

“We’re working very diligently to make sure that the process moves through not just smoothly, but also in a fast and high-quality way,” Patro says.

Brand image

Steak ’n Shake has been in existence for almost a century. As a brand, it has changed with the times and continues to modernize. The same can be said of its franchise resale program.

Michael Lassen, vice president of franchise sales, grew up with Steak ’n Shake always in the background in Springfield, Missouri. It’s a legacy brand, so some franchisees have been in the system for up to 40 years. Some have handed off their businesses to their children, who are now nearing retirement themselves.

“We want to make sure that they have a good exit strategy,” Lassen says.

Franchisees want to feel like their franchisors have their backs, he says. “They want to know that we’re here not just at the beginning, but also when they’re looking to exit,” he says. “We can assist them by creating different avenues and marketing strategies to help them find a buyer for their store.”

It’s not just about the financials, Lassen says. “A lot of the sellers want to make sure that the buyers who come in represent what they’ve established in the community and don’t take it for granted,” he says. “Once they find a good candidate, we evaluate them just as we would any new prospect. We take them through our discovery process to ensure they align with our values and our mission, that they’re a good fit, and that they have a strong understanding of the community they’re looking to purchase in.”

Preventing a restaurant closure doesn’t just protect the brand’s bottom line. It protects Steak ’n Shake’s image as well. “For the franchisor, a lot of this comes down to perception on the sales side. We don’t want our franchisees to just simply close their stores. Customers may not realize the owner has been there for 40 years and is looking to retire. If they see a closed door, the perception becomes, ‘Maybe the business isn’t doing well’ or ‘Maybe the brand isn’t doing well.’”

Steak ’n Shake has a long history with its franchisees, but Lassen says resale programs aren’t just important for mature brands.

“As a newer brand, franchisors need to look at this a little bit differently. What they’re selling isn’t just what they currently do,” he says. “They’re also selling a prospective franchisee, coming on board, a way to retire.”

That forethought is something that is helping to attract a new generation of Steak ’n Shake franchisees.

“We’re a legacy brand, but we’re repositioning it as a legacy brand that’s coming back,” Lassen says. “That’s very exciting for younger clientele and younger portfolio buyers. When we look at resales, we speak with individuals who grew up in the brand, but we also talk to people who aren’t as familiar with Steak ’n Shake and say, ‘We love what you’re doing. We love the product. We want to be part of it.’ It’s exciting to see.”

“A lot of the sellers want to make sure that the buyers who come in represent what they’ve established in the community and don’t take it for granted.”
Michael Lassen

Key Takeaways

• Franchise resales are becoming a strategic priority. About 60% of franchise systems now have formal resale programs, reflecting growing recognition of their role in system stability.

• Active franchisor involvement prevents store closures. When franchisors guide ownership transitions, they help keep locations open and protect system revenue.

• Resale programs protect franchisee equity. Structured support helps franchisees unlock the value they’ve built in their businesses when they’re ready to exit.

• Aging franchise networks make resales inevitable. Mature systems with long-tenured operators must plan for ownership transitions as franchisees retire or move on.

• Existing units can attract new franchise investors. Cash-flowing locations with operating histories provide financial transparency and reduce risk for buyers.

• Resales can fuel multi-unit expansion. Visibility into available units allows existing operators to grow within the system or across multiple brands.

• Cross-functional coordination is critical. Successful programs align lenders, brokers, legal teams, landlords, training, and operations to ensure smooth transitions.

• Strong resale systems strengthen franchise development. Prospective franchisees want to understand the full life cycle, including how they can exit the business later.

• Ownership transitions protect brand reputation. Preventing store closures avoids negative signals to customers, investors, and future franchise candidates.

• Resale planning supports long-term enterprise value. Franchisors that manage ownership changes strategically can maintain system growth while safeguarding brand equity.