Before You Sell Your Franchise (Part A)

If you own a franchise in New York, there may come a time when you decide to sell your New York franchise.

You may decide to sell a franchise because:

• you are simply tired of the franchise business;
• the value of the franchise has depreciated;
• competition has become too fierce and it threatens your sales and profits; or
• personal reasons led you to get out of the franchise business.

No matter your reason to sell your franchise, there will be certain guidelines and restrictions by which you must abide. These guidelines and restrictions will also have legal implications. Therefore, if you plan to sell a franchise in New York, you should first seek help from a New York franchise lawyer.

Getting Help From the Franchisor

Actually, when you sell a franchise in New York, you should not expect to get much help from the franchisor. By participating in the sale of a franchise, a franchisor risks interfering with or inhibiting the sale of the franchise. Therefore, a franchisor will generally only stick to the areas of the sale with which they have to be involved.

A franchisor may maintain contractual rights in regards to the sale of a franchise. These rights may include approving the buyer, approving the purchase and exercising the right of first refusal. So if you do decide to sell a franchise in New York, you must notify your franchisor of the sale, as they will be involved during certain stages of the process.

Finding Buyers for Your Franchise in New York

To find a buyer for your franchise in New York, you may engage a business broker, who you will pay a commission of the final sale price. There may also be a transaction fee, which can exceed $10,000. On the other hand, you may find a buyer on your own and can begin by listing your franchise for sale on the Internet.

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