Established franchise units with real cash flow — at a fraction of what the first owner paid to build them.
12
Active listings
32
States represented
$187K
Avg asking price
31%
Avg cash-on-cash return
2.4x
Avg price multiple (SDE)
12 listings found
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Why franchise resales
The third owner often gets the best deal of all.
6.5×
What the first owner pays
The original franchisee absorbs 100% of the build-out, equipment, and franchise fees — often paying 6× or more their annual earnings to open the doors.
3.5×
What the second owner pays
The second buyer skips the build-out and ramp-up risk, acquiring an established unit at roughly 3.5× SDE — still meaningful savings, but the seller still has leverage.
2.1×
What the third owner pays
By the third resale, seller motivation is high, buyer competition is low, and the perception discount is real — creating a rare window to buy a proven asset at a deep discount.
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Buyer education
How franchise resales work
Everything you need to know about finding, evaluating, and buying an existing franchise unit — at a price that actually makes sense.
Your path from browser to owner
Most buyers close on a franchise resale within 60 to 120 days of starting their search. Here's what that process looks like.
1
Search & filter
Browse listings by brand, location, category, ownership generation, and price. Save the ones that match your investment criteria and budget.
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2
Inquire & review
Send an inquiry through the listing. The broker sends you a Confidential Business Review with 3 years of financials, lease details, and unit performance data.
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3
Due diligence
Verify the financials, visit the location, speak with the franchisor, and have your attorney review the franchise agreement and lease before making any offer.
4
Make an offer
Submit a Letter of Intent (LOI) with your proposed price, structure, and any seller financing request. Most resale sellers negotiate — especially motivated ones.
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5
Franchisor approval
The franchisor must approve you as a buyer. Complete their application, attend any required training, and confirm any remodel requirements upfront.
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6
Close & take over
Sign the purchase agreement, transfer the franchise, pay the transfer fee, and take the keys. Most resales generate cash flow from day one.
Why ownership generation matters
The same franchise unit can sell at dramatically different multiples depending on which owner is selling it. The third owner typically gets the most favorable deal.
First owner
6.5×
avg price multiple (SDE)
Build-out paid byThis owner
Startup riskHighest
Time to cash flow6–18 months
Year 3 ROI (est.)~15%
Buyer negotiating leverageVery low
Second owner
3.5×
avg price multiple (SDE)
Build-out paid by1st owner
Startup riskModerate
Time to cash flowImmediate
Year 3 ROI (est.)~29%
Buyer negotiating leverageModerate
Third owner ✦
2.1×
avg price multiple (SDE)
Build-out paid by1st owner
Startup riskLow
Time to cash flowImmediate
Year 3 ROI (est.)~48%
Buyer negotiating leverageHigh — buyer wins
Frequently asked questions
Straight answers to what buyers ask us most.
Do I need the franchisor's approval to buy a resale?
Yes. All franchise transfers require the franchisor's written approval. This typically involves completing their buyer application, a background and financial check, and attending any required training. The process usually takes 30 to 60 days. Many franchisors also charge a transfer fee, typically between $15,000 and $30,000, which is separate from what you pay the seller.
What is SDE and why does it matter more than revenue?
Seller's Discretionary Earnings (SDE) is the total earnings available to a full-time owner-operator — net income plus the owner's salary and any non-recurring or personal expenses run through the business. It's the clearest picture of what you'd actually take home. Revenue is a vanity metric; SDE is what pays your mortgage. Most small franchise resales are priced as a multiple of SDE, typically 1.5× to 4× depending on the unit's performance and the seller's motivation.
What is a typical cash-on-cash return for a franchise resale?
Cash-on-cash return measures your annual SDE as a percentage of your purchase price. For a third-generation resale purchased at a 2×–2.5× SDE multiple, cash-on-cash returns of 40%–50% are achievable before debt service. After an SBA loan at current rates, a typical net cash-on-cash return on equity is 25%–35%. This compares favorably to most alternative investments with similar risk profiles.
Can I finance a franchise resale with an SBA loan?
Yes, and it's one of the most common financing vehicles for resales. SBA 7(a) loans can fund up to $5 million with terms up to 10 years for goodwill and working capital. Many franchise brands are on the SBA Franchise Registry, which speeds up lender processing significantly. You'll typically need 10%–20% in liquid capital as a down payment. Seller financing for 15%–25% of the price is also common and helps close the gap.
What happens if the franchisor mandates a remodel as a condition of transfer?
This is one of the most common hidden costs in franchise resales. Many franchisors use the transfer as a trigger point to require brand image updates, technology upgrades, or full remodels — often costing $50,000 to $200,000. Always contact the franchisor before making an offer to find out if any remodel is required. Factor that cost into your total all-in price and negotiate the seller's price down accordingly.
How do I verify the financials a seller provides?
Request three years of tax returns and reconcile them against bank statements and any POS (point-of-sale) system reports the franchisor tracks. Most franchise systems capture unit revenue data in real time. Ask the franchisor directly for the unit's gross sales history — franchisors track this for royalty calculation and are often willing to confirm revenue figures to serious buyers. Hire a CPA experienced in small business acquisitions to review the financials before you sign anything.
Buyer resources
Tools, guides & calculators
Everything you need to evaluate a franchise resale with confidence — from ROI calculators to due diligence checklists.
Guides & articles
Written for serious buyers who want to go deeper.
📋
Checklist · Free
The 30-Point Due Diligence Checklist
Every document to request, every question to ask, and every red flag to watch for before you make an offer.
Estimate your return before you make an offer. Adjust the sliders to model any deal.
Deal return estimator
Model the financial return of a franchise resale based on purchase price, earnings, and financing structure.
Annual SDE$75,000
Price multiple (× SDE)2.5×
Down payment20%
Loan interest rate7.5%
Loan term (years)10 yrs
Purchase price
$187,500
At 2.5× SDE multiple
Cash-on-cash return (pre-debt)
40%
Annual SDE ÷ purchase price
Your equity (down payment)
$37,500
Annual debt service
$17,600
Net annual cash flow
$57,400
153% return on equity
Companion resource
The Smart Buyer's Guide to Buying a Business
The complete playbook behind this site. Covers new franchise development, buying through business brokers, and the full strategy behind franchise resales — including the data on why third-generation owners often achieve the best returns of all.