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Since 1851, business owners across the country have been using <a href="https://1851franchise.com/details/5440/Why-Businesses-Choose-to-Grow-Through-Franchising">franchising</a> to take their businesses to the next level. They grew as much as they could on their own, then decided to offer their established, successful brands to entrepreneurs who open new locations through their own funds, with the support of the franchisor. For many franchisors, growing their systems with franchisees has helped them expand much quicker than if they tried to do it all on their own.

However, there are many cases when a franchisor grows quickly through franchising, then finds themselves stuck again. Maybe they&rsquo;ve outgrown the span of their knowledge base and don&rsquo;t have the capital or expertise to continue growing. Other times, someone might have spent years building up a franchise system and is ready to monetize the wealth rather than having it tied up in the value of the business. In either situation, the franchisor starts thinking about ways to get an investor&rsquo;s attention.

<a href="https://inclineequity.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=tips-for-preparing-your-franchise-system-for-sale-2704626" target="_blank" rel="nofollow">Incline Equity Partners</a> Partner Wali Bacdayan is a private equity expert and consistently hears from franchisors looking to sell their systems for various reasons. While the most common reasons franchisors reach out to Incline are for help growing or for monetizing their business, Bacdayan says that some franchise systems are more attractive to the private equity firm than others.

&ldquo;The situations that are typically the most attractive are the ones where a franchisor&rsquo;s team finds themselves stuck,&rdquo; Bacdayan said. &ldquo;That&rsquo;s the realization that most owners come to eventually &ndash; they&rsquo;ve grown broader than they could have imagined and need some help, whether it&rsquo;s strategic counseling or money. On the other hand, someone else might be 65 and prefer to retire on the money than having it tied up in the business. Those are the two most common situations, but of course there are other exceptions as well.&rdquo;

Whether or not you&rsquo;re thinking about eventually selling your franchise system, there are a few things you should start doing right away in order to best attract investors down the road.&nbsp;

Maintain comprehensive information on your system.&nbsp;

The first, and perhaps most important, thing you should do is ensure that you have good information laid out about your franchise system. Any data relative to how the franchisees are doing, how your royalty streams are coming in, documentation on processes and procedures, material on how you communicate with franchisees, system wide policies &ndash; basically anything that will help facilitate someone to analyze the system &ndash; should be very organized.&nbsp;

&ldquo;Perhaps the biggest mistake we see franchisors make is not having access to all of that info,&rdquo; Bacdayan said. &ldquo;An investor wants to know the health of the system and how well the franchisees are run. It&rsquo;s hard to grow a system if it already has an unhappy franchisee base, and while a lot of franchisors do have anecdotal evidence on the happiness of the system, many don&rsquo;t have exact data or feedback.&rdquo;&nbsp;

Once all of the information is in place, a private equity firm will be able to simply see what you have established, what your franchisee base is like and what your target franchisee looks like. That way, you can analyze together how you&rsquo;ll be able to grow with private equity funding.

Be prepared to discuss your corporate management team.

The next step, after analyzing the current franchisee system, is much more qualitative. The investor will want to see who will be continuing to lead the business &ndash; is it someone who is ready to retire and make an exit? If so, they&rsquo;ll want to know who will be left on the management team. Will they need to recreate the management team from scratch, or will the leaders just need some advice and capital?&nbsp;

&ldquo;From this point, it&rsquo;s largely a &lsquo;fit&rsquo; discussion,&rdquo; said Bacdayan. &ldquo;You&rsquo;re looking for a partner who can help you accomplish things you don&rsquo;t think you can accomplish on your own, so it&rsquo;s getting to know someone like us and how we might align on how things get done so that once we do agree on objectives, you find yourself with someone you want to work with.&rdquo;

While Bacdayan might prefer to work with a team that will be sticking around, some investors are happy recreating a management team for a retiring franchisor. There are a wide range of private equity investors, and a large part of selling a franchise system is finding the right partner that will help achieve long-term goals.&nbsp;

Selling a franchise system can be a lengthy process. Even after the conversations with investors begin, it might take anywhere from three months to over a year, but ultimately, for the benefit and well-being of both parties, it&rsquo;s important to find the right partner for you and your business. So, knowing that you won&rsquo;t be able to sell your system overnight, it&rsquo;s important to keep things well-organized and documented as soon as possible in order to set yourself up for future success.

Franchise Planning, Franchise Development, Franchise Sales

Tips for Preparing Your Franchise System for Sale

1851 Franchise

Whether you plan to sell your franchisee next year or in 20 years, start setting yourself up for success now

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Design with Precision Garage Door Service team members

RF Investment Partners and Burlington Capital Join Forces to Acquire Top Precision Garage Door Franchise

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<a href="https://hardeesfranchising.com/">Hardee’s</a>, a 65-year-old burger chain best known for its Thickburgers and breakfast biscuits, is facing a fast-moving round of closures driven by a franchise dispute rather than a bankruptcy filing.&nbsp;<a href="https://www.inc.com/ava-levinson/hardees-shutting-dozens-restaurants/91282586">Inc. recently reported that</a> 77&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-hardees-franchise-costs-fees-profit-and-data-2721286">Hardee’s</a> restaurants are expected to close within two weeks as one of the brand’s largest franchisees exits the system.&nbsp;According to the report, Hardee’s is suing&nbsp;<a href="https://www.arcburger.com/">ARC Burger</a> — a franchise operator owned by&nbsp;<a href="https://www.highbluffcap.com/">High Bluff Capital Partners</a> — alleging the company fell behind on required payments and other contract obligations. Twenty-eight locations had already gone dark as of late December, with remaining sites scheduled to shutter across eight states: Alabama, Florida, Georgia, Illinois, Missouri, Montana, South Carolina and Wyoming.&nbsp;At the center of the complaint is the franchising “stack” of ongoing fees and pass-through costs that keep a system running. ARC Burger allegedly owes more than $6.5 million, including royalties, advertising fund contributions, technology and training fees, rent and taxes, and that payments stopped in December 2024. Hardee’s also argued in the lawsuit that the franchisee’s cash flow was not being used to bring accounts current.&nbsp;Hardee’s, for its part, is framing the shutdowns as a contractual enforcement issue, not a brand-wide retrenchment. “These closures are a result of ARC Burger’s failure to cure its defaults under its franchise agreements, despite solid sales,” a Hardee’s spokesperson said.&nbsp;The situation highlights a familiar franchising pressure point: unit economics. Inc. reported that Hardee’s operates more than 1,800 U.S. restaurants and that average annual sales per location are less than $1.2 million, well below averages cited for&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-wendys-franchise-costs-fees-profit-and-data-2722520">Wendy’s</a> and&nbsp;<a href="https://1851franchise.com/how-much-does-it-cost-to-buy-a-mcdonalds-franchise-2724654#stories">McDonald’s</a>. Lower volumes can leave franchisees with less room to absorb higher labor, food and occupancy costs while staying current on fees.&nbsp;Hardee’s said it is working to limit fallout for workers and communities and is looking for ways to reopen closed restaurants. For franchising, the next chapter will likely involve finding replacement operators, transferring sites and rebuilding compliance — a reminder that franchise growth depends as much on franchisee solvency and execution as it does on consumer demand.Read the original article&nbsp;<a href="https://www.inc.com/ava-levinson/hardees-shutting-dozens-restaurants/91282586">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="https://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Hardee's Franchise - ARC Burger Lawsuit - 1851 Franchise

The closures stem from alleged unpaid royalties and missed franchise obligations by a major operator, not a broader chainwide collapse for the Hardee’s system.

Hardee’s Lawsuit Targets Franchisee as 77 Restaurants Prepare to Shut Down

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<a href="https://www.yum.com/wps/portal/yumbrands/Yumbrands/">Yum! Brands</a> is considering a potential sale of Pizza Hut and plans to close 250 underperforming U.S. locations, according to a&nbsp;<a href="https://simplywall.st/stocks/us/consumer-services/nyse-yum/yum-brands/news/yum-brands-weighs-pizza-hut-sale-as-portfolio-reset-accelera">recent article on Simply Wall St</a>. For the franchising industry, the significance is less about the stock and more about what it says about how large franchisors are managing brand portfolios in a high-cost operating environment.<a href="https://1851franchise.com/pizza-hut-franchise-deep-dive-2722519">Pizza Hut</a> is one of the most recognizable names in franchising. If Yum! decides to sell it, that would be a notable shift for a company built on a multi-brand platform. For years, large brand groups have argued that operating multiple concepts creates advantages, including shared resources, stronger purchasing power and the ability to invest in technology across the system. A sale would suggest Yum! believes those benefits no longer outweigh the effort required to improve Pizza Hut’s performance.The planned closures may have the most immediate impact on franchisees. When a franchisor reduces its footprint, it can change how the brand performs in local markets. Fewer locations can mean less convenience for customers, which can hurt overall traffic. It can also weaken the effect of local advertising when there are fewer restaurants supporting promotions in the same trade area.Closures can also affect store-level economics in ways that go beyond the locations that shut down. In some markets, remaining franchisees may pick up some displaced demand. In others, customers may switch to competitors. The changes can also affect local co-op advertising budgets and, depending on how purchasing and distribution are structured, can influence costs tied to volume.The move comes as competition in pizza remains intense, with&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-dominos-pizza-franchise-costs-fees-profit-and-data-2725506">Domino’s</a> and&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-papa-johns-franchise-costs-fees-profit-and-data-2724607">Papa Johns</a> continuing to push delivery, digital ordering and value-focused offers. Simply Wall St notes Yum! has been rolling out its Byte digital platform across brands. If Yum! changes Pizza Hut’s role in the portfolio, it could also change where the company focuses its technology and marketing investment.For franchise systems watching from the outside, Yum!’s review is a reminder that growth is not always the main priority. Sometimes the bigger decision is whether a legacy brand can be improved inside a platform or whether it will perform better under a different owner and a different plan.Read the original article&nbsp;<a href="https://simplywall.st/stocks/us/consumer-services/nyse-yum/yum-brands/news/yum-brands-weighs-pizza-hut-sale-as-portfolio-reset-accelera">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="https://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Yum! is reviewing the brand and closing 250 U.S. locations, a move that could affect franchisees and reshape its restaurant portfolio.

<a href="https://www.mcpfunds.com/">Monomoy Capital Partners</a> has entered into a definitive agreement to acquire&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-jiffy-lube-franchise-costs-fees-profit-and-data-2720873">Jiffy Lube International</a> from Shell for&nbsp;<a href="https://www.mcpfunds.com/news/monomoy-capital-partners-signs-definitive-agreement-to-acquire-jiffy-lube-from-shell/">approximately $1.3 billion</a>.Founded in 1979 and headquartered in Houston, Texas, Jiffy Lube helped pioneer the fast oil change industry and today operates more than 2,000 service centers across North America. The brand serves roughly 19 million customers each year and has expanded beyond its core oil change service to include a broader range of automotive maintenance offerings, such as brake, battery and tire services through its Jiffy Lube Multicare model. Over the past four decades,&nbsp;<a href="https://1851franchise.com/advice-from-a-multi-unit-franchisee-steve-isom-jiffy-lube-2726482">the company has built a significant franchise network</a> that has helped maintain its position as a leader in the quick-service automotive maintenance sector.“Few brands have the heritage and scale of Jiffy Lube,” said&nbsp;<a href="https://www.linkedin.com/in/lee-mlotek-344a795">Lee Mlotek</a>, managing director of Monomoy, in a press release. “As the original pioneer of the fast oil change, Jiffy Lube reshaped the industry and remains the market leader today. We are incredibly excited to partner with our franchisees to enhance the customer experience and value proposition that has made Jiffy Lube a trusted name for generations.”The private equity firm, which manages more than $5.3 billion in assets across its investment funds, has a history of investing in middle-market manufacturing, distribution and service companies.&nbsp;The deal also reflects a broader trend of&nbsp;<a href="https://1851franchise.com/why-franchising-and-private-equity-make-such-a-good-match-2720921">private equity investment in franchising</a>, as institutional investors increasingly view franchise systems as attractive platforms for long-term growth. Franchise brands often combine predictable revenue streams, strong brand equity and scalable expansion models, making them appealing targets for private equity firms seeking stable cash flow and opportunities for operational improvement.&nbsp;Read the original press release&nbsp;<a href="https://www.mcpfunds.com/news/monomoy-capital-partners-signs-definitive-agreement-to-acquire-jiffy-lube-from-shell/">here</a>.&nbsp;Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Monomoy Capital Partners’ acquisition from Shell positions the iconic automotive service franchise for independent growth across its 2,000-location North American network.

According to a&nbsp;<a href="https://www.businesswire.com/news/home/20260312305776/en/RF-Expands-Residential-and-Commercial-Services-Portfolio-with-Investment-in-Precision-Garage-Door-Service-Franchisee">recent release</a>,&nbsp;<a href="https://rf-partners.com/">RF Investment Partners</a>, a group focused on flexible capital solutions and value-add support to lower-middle-market businesses, has teamed up with&nbsp;<a href="https://www.burlingtoncp.us/">Burlington Capital Partners</a>, a group focused on family, founder and operator-owned lower-middle-market businesses, to acquire a prominent multi-territory&nbsp;<a href="https://franchise.neighborly.com/precision-door">Precision Garage Door Service</a> franchise.The investment marks the seventh platform for RF within the service space. Precision Garage Door Service, which is part of the larger&nbsp;<a href="https://www.neighborly.com/">Neighborly</a> ecosystem, specializes in the installation, maintenance and repair of garage doors.&nbsp;“We are proud to partner with management and the Burlington team to support continued growth by investing in people and operational excellence,”&nbsp;<a href="https://www.linkedin.com/in/peter-fidler-6787143">Peter Fidler</a>, managing partner and co-founder of RF Investment Partners, said in the release. “The sector continues to present compelling opportunities given the essential nature of garage door repair, and we look forward to building on Precision’s strong foundation to drive long-term value.”This deal is part of the broader trend toward institutionalized multi-unit and multi-territory operators. Previously, franchising was largely viewed as the place for “mom-and-pop” businesses. And while franchises remain small, local businesses, the aggressive entry of private equity firms focused on operators (franchisees) rather than the brand (franchisor) is bringing new energy to small business ownership.Read the full release&nbsp;<a href="https://www.businesswire.com/news/home/20260312305776/en/RF-Expands-Residential-and-Commercial-Services-Portfolio-with-Investment-in-Precision-Garage-Door-Service-Franchisee">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

The strategic investment marks the seventh residential services platform for RF and reflects a growing institutional desire for high-potential, operator-led franchises.

How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

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