Franchise transfers have always been part of the business. What’s different now is the sheer volume and the number of operators hitting an inflection point at the same time. Multiple forces are converging—demographics, economic pressure, and a franchise model that has gotten harder to run—creating what many describe as a rising tide of ownership transitions.
Robin Gagnon, cofounder and CEO of We Sell Restaurants, says one major driver is demographic.
“America is aging,” she says. “We’ve been talking about the ‘silver tsunami’ as a phenomenon for several years now.”
As baby boomers age out of ownership and fewer businesses stay in the family, more franchise units are being sold instead of passed down. For brands with older footprints, that can mean a wave of turnover all at once.
But the demographic wave is colliding with the realities operators have faced over the past several years. Gagnon says some franchisees delayed selling during the pandemic and its aftermath, pushing the decision down the road.
Now, she says, “operators are being squeezed on all sides.”
Robert Bhagwandat, senior director of franchise development at Checkers & Rally’s, also ties the rise in ownership transitions to recent economic cycles. QSR brands saw a boom during and after COVID, he says. Many operators made strong profits, expanded, and took on more risk because business was so good.
“The problem is that many didn’t plan for what would happen when conditions normalized or worsened,” Bhagwandat says. “Now, with inflation, supply chain issues, and tighter margins, some of those expanded businesses are no longer as sustainable.”
Franchising today is also much more complex than it was 20–25 years ago, and it’s no longer as easy for a single-unit owner to run a business and support a family the way it once was, adds Taco John’s CEO Heather Neary.
“In many cases, they’ve been so busy running their day-to-day business that they really haven’t thought about succession planning and what happens when they’re ready to retire,” she says.
Operators and intermediaries close to these deals say the difference between a smooth handoff and a scramble often comes down to how early the conversation starts and whether the brand has built the culture and playbook to start it early.
At Taco John’s, Neary says those discussions often surface through day-to-day relationships franchise business consultants have with operators, or through small friction points that lead to bigger questions.
“A lot of our Boomer franchisees aren’t as comfortable with technology,” she says. “So there’ll be a conversation around technology, and then it generally evolves into, ‘Hey, what does your next chapter look like?’”
When that conversation leads toward an exit, Neary argues the franchisor’s job is to slow down and treat it as more than a transaction.
“Taco John’s is 57 years old this year, and we’ve got a lot of long-standing franchisees that have really made us who we are today,” she says. “So, I think it’s really important as the franchisor that we handle those conversations with dignity.”
That matters, she adds, because when transition talk feels taboo, it tends to arrive late.
“It’s much easier to be proactive about having the conversation than to have a particular medical emergency come up where the franchisee is kind of caught on their back heels,” Neary says, “and then we’re all kind of scrambling.”
That’s why Taco John’s is formalizing a resale assistance program to guide franchisees through the transition process. The goal is to remove confusion and give owners a clear roadmap instead of leaving them to figure it out on their own.
The first hurdle is often expanding what owners believe is possible. Neary says some franchisees assume selling is “all or nothing,” when in reality there are multiple ways to structure an exit. For example, if they own the land, they can sell the business but keep the property and earn rental income. This can completely change how someone thinks about exiting.
From the brokerage side, Gagnon frames the moment as a system-level responsibility, not an ad hoc courtesy. Part of her work, she says, is to “try to teach brands that exit is not a four letter word.”
In her view, executive teams should be looking ahead for likely turnover—whether driven by underperformance, capital strain, or renewal timing—and resourcing the transfer process accordingly.
“What you absolutely don’t want as a franchisor is for those stores to go dark,” she says. And when an operator raises a hand, she adds, “it needs to be a priority,” even for brands focused on new-store growth.
The Reality of Resales
Not every transfer is the same. One scenario is a successful store where the owner wants to exit, often for personal reasons. These tend to attract strong interest and multiple offers since buyers see them as lower risk.
“The other camp is when you have a store that’s a problem—the operator is not operating well, not making money, or there’s some other issue, and you’re bringing in new ownership to solve the problem,” says David Bloom, chief development and growth officer at Capriotti’s. “Turnaround opportunities are harder to sell, but they can offer big upside if the new operator executes well.”
When diagnosing what went wrong at a problem store and whether it’s worth refranchising, most issues come down to the P&L.
“Is it a broken business, or is it just being run poorly? Because those are two very different things,” Gagnon says. “A lot of times what looks like a struggling business is really just mismanaged costs—food, labor—things that can be corrected.”
The biggest challenge, she stresses, is a bad lease.
“You can’t sell yourself out of a bad lease,” Gagnon says. “You can fix operations. You can fix costs. But if the real estate doesn’t work, that’s a much harder problem to solve.”
Even when costs are repairable, buyers look beyond the current snapshot and ask whether sales can realistically grow. The store may be underperforming today, but the buyer is paying for what they believe it can become.
Transfers are often more complex than people expect. Gagnon warns franchisors and franchisees not to underestimate the complexity, the number of parties involved, or the time required to execute a transfer.
“It’s not as easy as signing a contract, and then they’re in,” she says, because you’re not just satisfying a buyer and a seller. “Externally, you have the franchisor and you have the landlord, too. There are a lot of parties involved in these deals and each has their own process and approvals.”
In practice, a transfer often takes roughly six months—sometimes longer—once you factor in brand approval, landlord consent, financing, and training calendars. If it happens too quickly, Gagnon warns, important details are likely being missed.
Neary points to communication as the connective tissue that determines whether that complexity stays manageable or becomes chaos.
“When you transfer a restaurant, it’s not just transfer from franchisee A to franchisee B,” she says. “It’s also making sure the POS contract has been transferred properly, making sure the banking information is set up properly, making sure the credit card information is set up properly. So, the more communication you have, the more of a clear timeline you have, the better off you are.”
Bloom says all those moving parts make a transfer feel less like an ownership change and more like a “mini grand opening” with a hard cutover date. Transfers require a detailed plan covering training schedules, interim operations, marketing, and vendor transitions.
“When that plan isn’t dialed in,” he says, “there are a lot of things that can go wrong.”
Landlords are another friction point. They have to approve the new tenant, and Gagnon says they “don’t always move with the same speed or with the same priorities as everyone else.”
Strong franchise systems include lease clauses that require landlords to accept approved buyers, she adds, which makes transfers much smoother and “are worth their weight in gold.”
Deferred maintenance can also be a deal-breaker.
“When potential buyers get into the due diligence stage and start looking at the facility itself, if an owner hasn’t been keeping up with repairs and maintenance, that’s where things can start to get a little more controversial,” Bhagwandat says.
A simple issue, like a water heater that isn’t holding temperature, can turn into a standoff over who pays to fix it.
“The seller may say, ‘I’m not dealing with that. I already have my health certificate. That’s for you to repair,’” he says. “But the buyer might say, ‘I can’t get my health certificate because you need to repair this. This isn’t my problem. It’s your problem.’ That’s just one example of where things can really break down.”
Another issue is financial transparency.
“People might manipulate things on a tax return to basically lessen their tax liability,” Bhagwandat says, often by padding expenses not related to the restaurant. “The picture starts to get a little bit muddy in the financials when you’re looking at the P&L versus what the actual tax returns are saying.”
Then you get underwriters trying to dig into that to find out why there is such a big variance.
“You’ve got to be able to walk through that,” he says. “If not, the buyer’s not able to get financing, and then the deal falls apart.”
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After the Ink Dries
One of the most important things to remember about a franchise transfer is that it doesn’t just land on a spreadsheet. It lands on a team, too. From a seller’s perspective, staffing can be one of the trickiest parts to navigate, because the incentive is to keep everything stable as long as possible.
“The staff is the lifeblood of the restaurant,” Bhagwandat says, noting that buyers can get so focused on the upside they see on a P&L that they don’t spend enough time learning who’s actually running the day-to-day. Then the transition hits and it’s “a shock to their system, followed by turnover at the most unfortunate time,” when a new owner is trying to keep the business steady.
That “soft side” is exactly where incoming owners can get into trouble if they treat a transfer like a simple takeover, adds Dan Hawkins, cofounder and CEO of the Human Bean.
“Your store-level teams have been trained and working under a particular culture and coaching style,” he says.
His advice is to resist the urge to reset everything on day one. Instead, Hawkins says new owners should “spend a lot of time just listening and learning, understanding the culture, and making small steps instead of large ones at first.”
That people-first reality also explains why the franchisor’s role has to be both present and careful. Brands can’t be hands-off when it comes to training, standards, and operational support. But they also can’t become dealmakers.
“There is a certain amount of legal liability that these transactions can create,” Bloom says, which is why Capriotti’s doesn’t want to be in the middleman position on pricing and terms.
“We try to stay out of the middle,” he adds, noting that “tortious interference is a real thing.”
Bhagwandat describes the franchisor’s role as “kind of like a matching game in some cases.”
The point is to avoid putting someone into a business who doesn’t understand what the job requires.
“Just because you have the money to buy it doesn’t mean you can run it,” he says.
The franchisor has to ensure the buyer understands what they’re getting into, that the business will be operated properly after the transition, and the brand’s standards and reputation are protected. But they also can’t be overly restrictive and end up blocking good deals.
“It’s got to be a balance of what’s good for the owner, but what’s also good for the brand as well,” Bhagwandat says.
Hawkins says The Human Bean stays out of the details of the sales construct or asset price negotiations and recommends owners get legal help for those transaction details.
Where the brand leans in, he says, is “new franchise agreements, the training and marketing… those things that we’re really good at,” because that’s what sets a new owner up to win post-close.
Zooming out, Bloom views most ownership transitions as positive because new owners bring fresh energy, investment, and focus. New franchisees are usually required to update stores to brand standards and run a “grand reopening” campaign, which helps drive renewed customer interest. Capriotti’s tracks these transfers similarly to new store openings and often sees strong sales improvements.
In some cases, Capriotti’s requires new buyers, especially multi-unit operators, to commit to opening additional locations, ensuring they are growing the market—not just maintaining existing stores.
Bhagwandat frames it as simple math and planning. He describes a franchise life cycle with top performers who are growing and thriving, a large middle group that is stable, and a bottom group—around 10–20 percent—that will naturally turn over.
“Nothing is forever, so you need to plan for it,” he says, adding that turnover can be a shot of momentum. “You bring in new blood into the system, fresh ideas, and an injection of excitement and energy.”
Hawkins says his system has seen that kind of lift, too—and he doesn’t buy the fear that stores inevitably slip during a handoff. For his team, a transfer is a chance to fix what hasn’t been working and reestablish what the brand is supposed to feel like every day.
In that sense, the ending isn’t really an ending at all.
“This really isn’t a conversation about exits,” Hawkins says. “It’s a conversation about opportunities.”
