Selling Your Franchise: A Practical Guide

Expert Guidance from Steve Schneider, Business Broker, Advisor and Franchise Consultant with Over 30 Years Experience.

Whether your business is thriving or still developing, this guide will help you price your franchise right, present it effectively, and sell with confidence. Franchise & Business Opportunities LLC, also known as FranchiseUSA.Net, ensures maximum exposure to qualified buyers through showcase listings on BizBuySell, BizQuest, and LoopNet.

Step 1: Choosing the Right Time to Sell

This is a promising year for franchise resales, with the industry expected to exceed $936.4 billion, growing by 4.4%. Neighborly service franchises, like Molly Maid or Lawn Doctor, thrive due to recurring revenue, even as 86% of franchises report rising costs (IFA 2025 Outlook). Neighborly’s resale department accelerates closings by 25%.

Action: Gather 2–3 years of financials, review your franchise agreement, and contact Neighborly’s resale team to confirm readiness.

Step 2: Understanding Realistic Pricing

Realistic pricing reflects 2025 market conditions, with 86% of franchises facing rising costs. Neighborly franchises typically sell at higher values due to brand recognition.

  • Thriving Franchises:
    • Pricing Formula: 1.3x–2.8x SDE (e.g., $100K SDE = $130K–$280K)
    • Key Factors: Recurring revenue, client retention, low transfer fees ($6,000–$10,000)
    • Buyer Profile: Investors seeking stable cash flow
  • Developing Franchises:
    • Pricing Formula: 0.5x–1.0x SDE or $50K–$100K territory value
    • Key Factors: Exclusive territory, Neighborly’s training, growth potential
    • Buyer Profile: Entrepreneurs seeking low-cost entry

Action: Have Neighborly’s resale team calculate your SDE or territory value.

Step 3: Highlighting Your Franchise’s Strengths

Attract buyers by showcasing your Neighborly franchise’s value:

  • Brand Reputation: e.g., “Molly Maid’s national recognition builds client trust.”
  • Proven Systems: e.g., “Shelf Genie’s software supports 20% client growth.”
  • Neighborly Support: e.g., “6-week training and lead generation.”
  • Defined Territory: e.g., “15-mile exclusive radius with 10K untapped households.”

Action: List your franchise’s strengths and share them with Steve.

Step 4: Preparing a Confidential Sales Memorandum (CSM)

A CSM is a detailed document that highlights your franchise’s value. Steve can help you create one that includes:

  • Established Revenue
  • Proven Systems
  • Tangible Assets
  • Financial Transparency
  • Brand Recognition
  • Franchise Network Support

Action: Provide this information to Steve to help create a professional CSM.

Step 5: Managing Buyer Interactions and Negotiations

Steve will request the NDA and provide the initial response to buyer inquiries. Neighborly’s resale team handles buyer vetting and coordinates inquiries, ensuring you engage with serious buyers.

  • Respond Quickly: Reply within 24 hours.
  • Stay Professional: Maintain clear, respectful communication.
  • Highlight Value: Emphasize your franchise’s strengths and potential.

Action: Ask for feedback from Neighborly’s resale team.

Step 6: Ensuring a Smooth Transition

  • Training and Support: Offer 2–4 weeks of training.
  • Coordinate with Neighborly: Confirm the buyer’s training schedule.
  • Transfer Costs: Neighborly fees range from $6,000–$10,000.

Action: Confirm transition details with Neighborly’s resale team.

Step 7: Avoiding Common Mistakes

  • Overpricing: Use realistic pricing formulas.
  • Hiding Issues: Disclose financial or operational challenges.
  • Disorganized Financials: Provide 2–3 years of clean records.
  • Delaying Responses: Reply to buyer inquiries within 24 hours.
  • Skipping Transition Support: Offer a clear handoff period.

Final Reality Check

Selling your Neighborly franchise is about showcasing its value—whether through strong revenue or untapped potential—not recouping your investment.

Ready to list your business? Click here to complete the Seller Listing Form.