Joel Libava
Almost everyone I work with talks about buying a “new” franchise.
The pick a concept, sign the franchise agreement, build out the location and open the doors type.
That’s the story most people know.
But there’s another story quietly gaining momentum. A bigger one. And it’s going to get loud.
Franchise resales are about to become one of the biggest opportunities in franchising.
Here’s why, along with what you need to know before you chase one.
Key Takeaways on Franchise Resales And The Opportunity
Franchise resales are becoming a primary acquisition channel.
In a nutshell, aging owners are exiting in real numbers. Some resales offer genuine value… established cash flow, existing customers, and sometimes an assumable SBA loan.
But a declining business with familiar branding is still a declining business. The seller’s motivation matters. So do the lease terms and deferred capital costs.
With that in mind, the industries most likely to surge in franchise resale volume include senior care, QSR, fitness, auto services, and B2B concepts.
That said, if you’re evaluating one, hire a franchise-experienced CPA to recast the financials.
In my experience, revenue alone tells you almost nothing. Know what the owner actually took home. Know your lease position. The buyers who do that work find the real bargains. The ones who skip it inherit someone else’s problem.
The Small Business Owner Retirement Wave Is Real
The U.S. has roughly 800,000 franchise locations operating right now. A significant chunk of those are owned by Baby Boomers. Many of those owners have been running their businesses for 15, 20, even 25 years.
They’re tired.
They want out.
Check the data out, from McKinsey Insights:
“This shift has far-reaching implications for business ownership. Today, more than half of all small-business owners in the United States are over the age of 55—up from roughly 30 percent in 2002. One in four small-business owners is 65 or older. This aging cohort represents approximately 1.5 million firms across the country, with baby boomers alone owning nearly a quarter of all small businesses, about double the share held by their predecessors two decades ago.”
That means that over the next several years, a wave of small business/franchise business owners are going to put their businesses up for sale.
Some will list quietly through their franchisors.
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Others will go through business brokers.
A few will post on platforms like BizBuySell and hope for the best.
The result?
A growing inventory of established franchise businesses hitting the market at the same time.
That’s a shift worth paying attention to.
Note: Be sure to check out this chart on the franchise sectors poised for heavy resale volume.
Why Franchise Resales Can Be Bargains
Here’s what a resale offers that a new franchise doesn’t.
History. You can see actual revenue numbers. Real expenses. Real customer patterns. There’s no guessing what the business might do — you can see what it has done.
An existing customer base. In service-based franchises especially, that’s worth real money.
Trained staff. In some cases, the whole team stays. You’re not starting from zero.
Shorter path to cash flow. You’re not in build-out mode. The business is already running.
On top of that, some resales come with an assumable SBA loan. The original owner got financing at a favorable rate years ago. If that loan is assumable, you might be able to step into it — avoiding the current interest rate environment entirely. That’s a legitimate financial advantage that doesn’t get talked about enough.
Fact: SBA loan assumptions aren’t guaranteed. They require lender approval and a creditworthy buyer. But when they work, they can meaningfully reduce your total cost.
Why Some Franchise Business Resales Can Be Disasters
Not every resale is a bargain. Some are traps.
Ask yourself this: Why is this owner actually selling?
Retirement is a clean answer. Health issues, a legitimate life change — those are clean answers too.
But if the business is declining, if the territory is saturated, if the franchisor relationship has deteriorated — those are different stories. And sellers aren’t always forthcoming.
It should be noted that some resales hit the market because the owner couldn’t make the model work. The financials look acceptable on the surface. But dig deeper and you find deferred maintenance, customer attrition, or a lease that’s about to get punishing.
Don’t fall in love with the story. Fall in love with the numbers.
What Resale Buyers Miss On The Financials
This is where resale evaluations go wrong.
Buyers look at revenue. They look at gross profit. They stop there.
What they miss:
Owner’s actual compensation. Many small franchise owners run lean personal expenses through the business. The real cash flow picture only emerges when you normalize the financials properly.
Deferred capital expenditures. Equipment that needs replacement. A refresh the franchisor will require in two years. These aren’t small numbers in food, auto, or fitness concepts.
Lease terms. How many years are left? What’s the renewal clause? A resale with three years left on a lease and an indifferent landlord is a ticking clock.
Royalty escalations. The original FDD may have had different fee structures. Pull the current FDD and compare.
If you’re serious about a resale, hire a franchise-experienced CPA to do a proper recast of the financials. Not a general business accountant. Someone who understands how franchise P&Ls actually work.
Finally, hire a franchise lawyer. You’ll need help deciphering the FDD and the Franchise Agreement.
The Industries To Watch
Not all sectors will see the same volume of resales. Some industries are going to produce more of them — and faster.
Senior care and home health. Owners who entered this space in their 50s are now in their 70s. Many are ready to exit a demanding, high-stakes business.
Quick service restaurants. The multi-unit QSR owner who built up five or six locations over 20 years is looking at a serious liquidity event.
Fitness studios. The post-pandemic shakeout already thinned the herd. What survived is leaner — and some of those owners are exhausted.
Auto services. Oil change, detailing, and repair concepts have a massive Baby Boomer ownership base.
Staffing and business services. Less sexy than food, but high-margin. Owners in this space built quiet, durable businesses. The resale prices will reflect that.
My Franchise Resale Opportunity Summary
New franchise opportunities will always have appeal. Clean slate. Latest systems. Fresh territory.
But the resale market is maturing fast. And for buyers who know how to evaluate them — really evaluate them — the right resale can be a smarter entry point than a new unit ever was.
The key word is “right.”
So, do the work. Get the right advisors. And don’t let the appeal of a turnkey business blind you to what you haven’t been told yet.
The opportunity is real. So is the risk.
Know the difference.
About the Author
Joel Libava is The Franchise King® — an independent franchise advisor with 25+ years in the industry, two published books on franchising, and his writing has been featured in The New York Times, Forbes, CNBC, Entrepreneur® Magazine and others. In addition, he wrote exclusively for the U.S. Small Business Administration blog for eight years. He doesn't sell franchises. Instead, Joel helps you figure out if franchise ownership is actually right for you — and if it is, teaches you his powerful, proven-to-work franchise research techniques, so you can make a smart, informed decision on a franchise to own and be your own boss.
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