How Franchises Handle Transfers and Resales

Franchise Update Media has been researching franchise lead generation and franchise recruitment processes for more than a decade. An annual in-depth online survey queries franchise development professionals about a number of issues related to their lead generation and recruitment strategies. The results are presented each year in the Annual Franchise Development Report (AFDR).

The AFDR is a valuable resource that can provide crucial insights into franchise development, lead generation, and recruitment best practices. It’s the kind of information that can help brands assess what they are doing right, and what needs improvement.

The annual project seeks to identify what’s new and innovative in franchise lead generation, recognize the methods and approaches yielding the best results, and gain insights into franchisors’ perspectives on current and future business performance.

Survey participants were franchisors who completed an in-depth questionnaire online. Responses were aggregated and analyzed to produce a detailed view into the recruitment and development practices, budgets, spending allocations, and strategies of a wide cross-section of franchisors. The data along with accompanying commentary and analysis provided the basis for the 2025 AFDR.

The in-depth report features results from more than 110 organizations actively expanding their franchise systems. The thoroughly researched report spotlights the latest trends and reveals various franchise lead-generation and sales trends. The AFDR represents companies totaling more than 50,000 franchise units and 42 industry categories.

Franchise Update Media creates this report annually and shares its findings with franchise development teams to give them an edge in their lead generation and recruitment efforts.

Bringing in New Franchisees Through Transfers

Unit transfers are an important, but somewhat overlooked, part of the franchise development process. While much of the focus of growth goes toward bringing in fresh franchisees and adding new units, similar attention must be paid to eventually replacing current owners.

Whether it is through retirement or people inevitably exiting the system, all current franchisees will become former franchisees. How franchisors handle the process can vary, but it is an important part of the turnover and development of the system. The AFDR examined franchisor involvement in this process, where franchises get their transfers/resales, and how many they average per year.

Exactly half of the respondents from the survey said they had programs to actively recruit franchise buyers to transfers/resales. A similar percentage (56 percent) said they have a formal resale program in place to support transfers and resales.

The vast majority of franchises (84 percent) indicated that their development departments are involved in transfers or resales. We asked survey respondents how their transfers are typically secured, and the majority came from franchisees within the system (77 percent). A quarter of the respondents said they get franchisees from other brands. They also said that 70 percent of transfers/resales go to new franchise buyers.

Slightly more than half of the franchises surveyed (53 percent) said they included the resale/transfer agreement in their FDD. We also asked franchises how many resales/transfers they are averaging as a percentage of total operating franchise units or territories. Although the responses varied, 89 percent said resales/transfers accounted for 10 percent or less of their total operating units. Only 21 percent of franchisors said this percentage was higher than normal due to the lingering impact of Covid-19.

For more information about the 2025 AFDR and how you can purchase the report, please scan the QR code below or click afdr.franchiseupdate.com/.