Franchise buyers and their advisers will request a comprehensive set of documents during due diligence on a franchise resale. Buyers also need to share information with the franchisor as part of the approval process. Assembling documentation before going to market — not during due diligence — protects your asking price, compresses the timeline, and minimises the risk of price reductions based on missing information.
Financial Documents
Accounts and trading records:
- 3 years of full statutory accounts (Companies House-filed or accountant-prepared sole trader accounts)
- 3 years of management accounts (P&L, balance sheet)
- Current year management accounts to latest month
- 2–3 years of VAT returns
- 2–3 years of corporation tax returns or self-assessment returns
- Bank statements: 3–6 months of the main operating account
Revenue analysis:
- Monthly revenue breakdown by stream (last 3 years) — segmented by products/services where applicable
- Royalty/franchise fee payment records: evidence of franchise fee payments to the franchisor (last 3 years)
- Breakdown of fixed vs. variable costs
- EBITDA bridge: normalised EBITDA calculation with owner drawings adjusted to market-rate management salary
Customer/revenue concentration analysis:
- Top customers by revenue (if B2B) — showing concentration risk (% of revenue from top 5/10 customers)
- Subscription or recurring revenue documentation (if applicable)
- Contract values and renewal history for significant customer contracts
Franchise Agreement Documents
These are the primary legal documents governing the franchise relationship and are the first documents any buyer’s solicitor will examine.
- Copy of the current franchise agreement (full document)
- Any side letters, addenda, or variations to the franchise agreement
- Development agreement (if applicable — for multi-unit operators)
- Territory map or territory description confirming your exclusive/non-exclusive territory
- All correspondence with the franchisor regarding the agreement, performance, or territory (last 3–5 years)
- Renewal notices: any formal renewal documentation, including confirmation of renewal terms
- Any performance notices or formal letters from the franchisor (and your responses)
- Marketing fund contribution records and statements (if applicable)
Note: Buyers will review the agreement terms in detail, including: remaining term, renewal options and conditions, assignment/resale provisions, fees payable on resale (transfer fee), exclusivity terms, post-term non-compete clauses, and any minimum performance obligations.
Legal and Ownership Documents
Business structure:
- Certificate of incorporation (if limited company)
- Memorandum and articles of association
- Current shareholding register
- Shareholder agreement (if applicable)
Premises and property:
- Copy of office/premises lease (full document) — or evidence of home-based operation if applicable
- Lease assignment provisions (does the landlord or franchisor consent to assignment?)
- Any property owned (title register if owned freehold)
- Vehicle finance agreements (if vehicles are part of the business)
- Equipment finance agreements (HP, leasing)
Intellectual property:
- Confirmation that the franchise licence grants right to use the brand and systems
- Any local trademarks or domain names registered in your name (as distinct from the franchisor’s)
Employment Documents
- Contracts of employment for all employed staff (signed copies)
- Current salary and variable pay schedule
- Commission structures (written basis)
- Staff schedule: name, role, start date, salary, hours
- Auto-enrolment pension records
- Details of any current or threatened employment claims, tribunal proceedings, or formal grievances
- Staff handbook (current version)
- Contractor agreements for self-employed workers (if applicable)
- P60s for last 2 years
Compliance and Regulatory Documents
The specific compliance documents vary significantly by franchise sector. Common requirements:
All franchises:
- Health and safety risk assessment (current)
- Fire safety records (if premises-based)
- GDPR/data protection: ICO registration, privacy notices, data processing agreements
- Anti-money laundering policy (if applicable to sector)
Sector-specific (examples):
- Food/hospitality: Food hygiene ratings and environmental health inspection records
- Care/healthcare: CQC registration, staff DBS checks, inspection reports
- Financial services: FCA authorisation records, compliance monitoring reports
- Vehicle/transport: DVSA compliance records, operator licence
- Property: ARLA/NAEA membership, CMP scheme membership, TPO membership
Check your franchise operating manual for sector-specific compliance records required by the franchisor’s standards.
Insurance Documents
- Current public liability insurance policy and schedule
- Employer’s liability insurance certificate (if employing staff)
- Professional indemnity insurance (if applicable to sector)
- Business interruption insurance
- Key person insurance (if applicable)
- Vehicle insurance (if applicable)
- Details of any current or prior insurance claims (last 3–5 years)
Operations and Systems
- Operations manual confirmation: current version held and accessible
- Training records: completion of required franchisor training programmes
- Supplier contracts: approved supplier list, key supplier agreements, pricing agreements
- CRM or management system: details of system used, data export options
- Territory/customer data held in the system (evidence of active accounts)
- Website and domain: ownership and access details (franchisor-owned vs. franchisee-owned)
- Social media accounts: any local accounts and administrative access
For the Franchisor Approval Process
Most franchisors require the buyer to submit directly to them for approval. You cannot control this process, but you can support it. Common franchisor requirements:
- Buyers must complete the franchisor’s own application form
- Buyers must attend a franchisor assessment/interview (Discovery Day)
- Buyers must demonstrate financial capacity to acquire and operate (bank statements, asset evidence)
- Buyers must pass background checks (criminal, financial)
- Buyers must complete initial training (often at buyers’ expense)
Seller’s role: Facilitate the introduction between buyer and your franchise development manager as early as possible. Pre-screen buyers informally with your franchise contact before entering heads of terms.
Pre-Sale Timeline: When to Prepare
- 12 months before marketing: Documentation audit. Identify gaps in franchise correspondence, compliance records, and accounts.
- 9 months before marketing: Address compliance gaps. Have accounts reviewed and normalised by accountant.
- 6 months before marketing: Confirm the franchise agreement’s assignment provisions and transfer fee with the franchisor. Understand the approval criteria for incoming buyers.
- 3 months before marketing: Assemble data room. Revenue analysis and EBITDA normalisation complete.
- Going to market: Provide buyers with a summary pack (financial summary, franchise agreement overview, territory confirmation, UDA/performance data). Full documentation in data room on NDA signature.
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For the full franchise sale process, see how to sell a franchise business in the UK. For preparation actions that maximise your sale value, see how to prepare your franchise business for sale.
Frequently Asked Questions
What documents are needed to sell a franchise business?
The core documents are: 3 years of accounts, the full franchise agreement with any addenda, royalty payment records, the EBITDA bridge normalising owner drawings, employment contracts, and compliance records relevant to your sector. Buyers will also want territory documentation, any performance correspondence with the franchisor, and a customer/revenue concentration analysis if B2B.
What is a franchise transfer fee and does it affect the documents needed?
A franchise transfer fee is a payment required by the franchisor on resale — typically a percentage of the sale price or a fixed amount. The transfer fee clause is in your franchise agreement and should be identified and confirmed before going to market. Buyers will factor the transfer fee into their offer. It does not change the documents you need, but it affects the economics of the transaction.
When should I tell the franchisor I am selling?
Most franchise agreements require you to notify the franchisor before marketing the business. Review your agreement’s notification provisions carefully. Some franchisors want early notification; others only require notification when a buyer is identified. Your franchise development manager can advise on the franchisor’s preferred approach.