Selling a franchise is unlike selling any other business — the franchisor controls the process. Here's what your franchise is actually worth and what to expect when you decide to sell.
11 min read
Updated April 2026
2.0x–4.0x
Typical SDE Multiple
30%–80%
Of Annual Revenue
Required
Franchisor Approval to Sell
What Is a Franchise Worth in 2026?
Most franchises sell for 2.0x to 4.0x Seller's Discretionary Earnings (SDE). A franchise generating $200,000 SDE typically sells for $400,000–$800,000. The multiple depends heavily on the brand, the territory, the remaining franchise term, and your performance ranking within the system.
Franchise resales are a distinct market from independent business sales. The franchisor plays an active role in the transaction — approving buyers, collecting transfer fees, and sometimes exercising a right of first refusal. Understanding this process before you start is essential.
Key difference from independent businesses: When you sell a franchise, you're not selling the brand — you're selling the right to operate under it for a defined territory and term. The value is in the cash flows you've built, not the intellectual property of the brand itself.
How Brand Strength Affects Franchise Value
Brand tier is the single biggest determinant of franchise resale multiple. A top-tier brand franchise is one of the most desirable business acquisitions available — predictable cash flows, proven systems, and instant brand recognition. A declining or weaker brand franchise can be difficult to sell at any price.
Brand Tier
Examples
SDE Multiple
Key Factor
Tier 1 — Iconic brands
McDonald's, Chick-fil-A, Marriott
3.5x – 5.0x+
Extreme demand, scarce supply
Tier 2 — Strong national brands
Subway, Dunkin', 7-Eleven, UPS Store
2.5x – 4.0x
High name recognition, proven model
Tier 3 — Regional / growing brands
Various regional QSR, service franchises
2.0x – 3.0x
Growing brand, less proven
Tier 4 — Weak or declining brands
Struggling concepts, declining categories
1.0x – 2.0x
Brand headwinds, hard to sell
The Franchisor Approval Process
Almost every franchise agreement requires franchisor approval before a transfer can occur. Here's what to expect:
Right of first refusal — many franchisors can match any offer you receive and buy the franchise themselves at that price
Buyer approval — the franchisor must approve the buyer's financial qualifications and background
Transfer fee — typically $5,000–$25,000, usually paid by the buyer but negotiable
Training requirement — new owner typically must complete franchisor training before taking over
Franchise agreement update — buyer typically signs a current franchise agreement, which may have different terms than yours
Start by reviewing your Franchise Disclosure Document (FDD) — Item 12 covers transfer rights and fees, Item 17 covers termination and transfer conditions. These will define your constraints before you go to market.
What Drives Franchise Value Up or Down
Value Drivers
Strong brand tier — top-tier brands command premium multiples and attract more buyers
Territory exclusivity — exclusive territory rights are a significant asset
Long remaining franchise term — 10+ years remaining is ideal; under 5 years reduces buyer confidence
Most franchises sell for 2.0x–4.0x SDE. A franchise generating $200,000 SDE typically sells for $400,000–$800,000. Top-tier brands (McDonald's, Chick-fil-A) command higher multiples and are much harder to acquire.
Yes. Almost all franchise agreements require franchisor approval of the buyer before a transfer can occur. The franchisor also typically charges a transfer fee ($5,000–$25,000) and may have a right of first refusal.
Brand strength is a major value driver. Top-tier brands command 3.5x–5x+ SDE. Mid-tier brands typically sell for 2.5x–3.5x. Weaker or declining brands may sell for 1.5x–2.0x SDE.
A transfer fee is charged by the franchisor when you sell your franchise. It typically ranges from $5,000 to $25,000 and is usually paid by the buyer, though it's a negotiating point.