Author name: Research Team

Heads of terms matter more in franchise territory sales than in most other business sales — the terms you agree govern how seller, buyer, and franchisor interact through due diligence, consent, and completion. Eight topics cannot be left vague: total consideration and structure (earn-out to be agreed is a concession, not a placeholder); franchisor consent as a condition precedent with a realistic 8-12 week long-stop; earn-out mechanism defined in full at HoT stage; asset vs share resolved before BADR eligibility is confirmed; non-compete and non-solicitation checked against franchisor post-termination restrictions; transition period obligations; exclusivity with good-faith progress milestones; and confidentiality consistent with franchise agreement obligations.

A practical pre-sale preparation checklist for franchise territory sellers: accounts and normalised EBITDA, client schedule and at-risk disclosure, client contract gap audit, franchise agreement remaining term, equipment schedule, and employment arrangements. Preparation must start 6–12 months before marketing.