When Selling Your Franchise to Family Cross Your t’s and Dot Your i’s

selling your franchise business

A 2012 Harvard Business School study, cited by the International Franchise Association (IFA), reports that almost 70 percent of businesses don’t survive to the second generation, and of those, only 12 percent reach the third generation.

The primary cause, according to the IFA, since 1960 the governing voice for family run businesses, is the failure of franchise owners to create and execute a management succession plan. For the IFA to broadcast those findings is a call to action: If you want to pass along your business—that you’ve worked so long and hard to build—to a family member and leave a legacy, PLAN for it!

Every franchise has different requirements for succession. So the key to a seamless plan is knowing what the franchisor expects of the successor and then developing a plan to get the next generation ready and able to assume ownership when the time comes. The core of your plan should include the three widely acknowledged t’s for transferring your business: training, transaction and transition.


Make sure that the person you’re going to pass the business down to knows the business from the ground up, and is both passionately interested and up for the challenge(s). It’s a sizable understatement to suggest that you may deeply believe your successor has the skills, personality and temperament to takeover, but without extensive training, he or she won’t be approved by the franchisor, will lack the experience and product knowledge to motivate and manage people, and be unable to credibly serve clients and network the business.


The transaction process should be professional, similar to what it would be with any other buyer. And even if the nondisclosure agreement, valuation and negotiations may be more relaxed in family transactions, there really is more at stake because you’ll still be emotionally, if not financially, attached to the business, and your reputation will continue to be linked to it. It’s best to assemble a lawyer, an accountant, and a financial advisor as a team, respected by you and your successor, to help you resolve thorny issues and navigate sensitive territory—like the seller who won’t let go.


If you want to stay involved in the business, it can be a benefit. But in what role and for how long? Put it in writing. Remember: When someone buys a franchise, industry clichés insist it’s to own their own business and to be their own boss. Why would it be any different for a next generation? Dad, I passed the test, I can drive the car now. Before you hand over the keys, there are several ways you can ease the transition for you and your successor. Depending on how the new business is structured, consider serving on the board of directors or a board of advisors. Schedule meetings to introduce your successor to financially important and influential clients. Offer to support behind the scenes or out front in new business efforts. And, contact vendors to ensure relationships and agreements are maintained.

To complete the transfer dot your i’s


Your successor will surely want to grow the business, to take it to the “next level.” After having participated in the franchisor’s training program, worked in the business, examined the books, evaluated staff members, assessed the market, and viewed the future with a pair of fresh eyes, your family member may have a new vision for the business you built. You may see it differently and with some anxiety, particularly if the payout is over several years and represents a hefty portion of your continuing retirement plan. Here your wisdom and communication skills may be tested. Your bottom-line message: Successful leaders embrace the importance of creating a shared vision for all stakeholders—investors, advisors, staff, suppliers and clients—to work together to reach your destination.

international Franchise Association

The IFA published a 21-page handbook titled, Franchise Succession Planning and Transfers. An online search will link you to a PDF file. The “Forward” reads in part:  “Selling and transferring ownership of a franchised business is something that many franchisees do not think about until they are at the point where they are retiring or ready to sell their businesses…Perhaps the best way to prepare is to create a succession plan – an advance strategy that maps out how a franchisee plans to remove himself from the business in the future and transfer it to a new franchisee owner, who could be a family member.” The handbook is free; the information is priceless.


Image360®, the fastest growing brand within the Sign and Graphics Division of Alliance Franchise Brands, is a leading visual communications business because we know how important it is to help new Franchise Members develop both growth plans and exit strategies. We invite you to contact one of our development professionals for guidance on our ownership steps, business-planning process, and exiting opportunities, including transferring your business to the next generation and preserving your legacy.


Learn more about the advantages of owning an Image360 franchise

Image360 is the premiere B2B franchise serving the growing multi-billion-dollar market for graphic communications services—graphic design, digital displays, innovative branding, and signs for every surface and situation. U.S. and Canadian franchise owners have every opportunity to reach their financial and lifestyle goals when backed by a 30-year industry leader…a Franchise 500® brand…a robust business model…ongoing training…dedicated support…state-of-the-art equipped Centers…family friendly hours… recurring revenues from repeat customers…and, the Alliance Franchise Brands network. Our motto: Make money AND have fun!


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Alliance Franchise Brands LLC is a world leader in marketing and visual communications linking more than 650 locations in North America and the United Kingdom. Our independently owned and operated franchises provide national, regional and local businesses and organizations with a one-stop resource for technologically advanced and strategically sound solutions for their graphic communications needs. Our sought after and prospering brands include Image360, Allegra Marketing Print Mail, American Speedy Printing, Insty-Prints, KKP, Signs By Tomorrow, Signs Now, and RSVP Publications.