Franchise Resale Value Calculator

Franchise resale multiple cheat sheet by type (2026)

These are the multiples buyers actually use in LOIs and SBA-backed deals, not the aspirational numbers on franchise sales decks. The base moves with SDE size, then the brand, lease, growth, and unit count adjust it up or down.

• • Single-unit food / QSR: 2.0–2.8× SDE (thin margin, high royalty drag, concept-aging risk).
• • Single-unit service (cleaning, lawn, pest): 2.2–3.2× SDE (recurring revenue is valuable; lower ceiling per unit).
• • Single-unit senior care: 2.5–3.5× SDE (private-pay recurring, demographic tailwind, but caregiver-dependent).
• • Single-unit fitness: 2.0–3.0× SDE (membership recurring, but trend-sensitive and lease-heavy).
• • Single-unit auto services: 2.5–3.5× SDE (real estate + recurring maintenance intervals add value).
• • 3–5 unit portfolio: 3.0–4.0× SDE (DM leverage, diversified risk, salable to PE-style buyers).
• • 6+ unit portfolio / regional operator: 3.5–4.5× SDE (admits institutional buyers; resales take longer).
• • Premium brand with resale program (rare): 4.0–5.0× SDE on clean deals.

What kills multiples in due diligence

Sellers often anchor on a number the franchisor sales rep mentioned at recruiting. Real buyers underwrite to the SDE shown on tax returns, not the franchisor's average. These are the four issues that drop a multiple by 0.5–1.0× in DD.

• • Lease with under 5 years remaining (and no options). Buyers won't pay for a business you can lose to a landlord.
• • Trailing 12-month revenue declining vs prior year. Even 5% decline knocks 0.3–0.5×.
• • Key-employee dependency (one GM holds the keys to operations) — buyer treats it as a turnaround.
• • Owner-add-backs that won't survive an audit (personal vehicles, family payroll, the gray-area stuff).

Net proceeds to seller: fees, taxes, and the real check

Gross resale value is not what lands in your account. Seller-paid costs typically run 12–18% of gross value, and tax treatment depends on how the deal is structured (asset vs stock sale, goodwill allocation, depreciation recapture).

• • Broker / M&A advisor: 8–12% for sub-$5M deals, 3–6% for larger portfolios.
• • Closing costs: attorney, escrow, franchisor transfer fee, lease assignment — typically 1–3%.
• • Tax: ordinary income on depreciation recapture; long-term capital gains on goodwill (if held >1 year). Structure matters — consult a CPA before accepting an LOI.
• • SBA note payoff: if the unit is financed, the loan balance is paid from closing proceeds.

Why multi-unit portfolios trade higher

PE and family-office buyers pay premium multiples for 3+ unit portfolios because the operating leverage justifies a DM hire ($110K covers 3–5 units), unit-to-unit best practices are de-risked, and the deal size finally clears their minimum check size. Single units are bought by individual operators using SBA, who can't pay PE multiples.

When to sell vs. when to hold

Timing the sale is as important as the multiple. The best exit windows are when trailing revenue is growing, the lease is long, a strong GM is in place, and the franchisor's transfer process is cooperative. The worst time is when you are forced to sell — personal burnout, health, or a declining lease all bleed value.

• • Sell: 3+ years of stable or growing SDE, lease ≥ 7 years remaining, GM runs daily ops, and you want to redeploy capital.
• • Hold: unit is still compounding, reinvestment ROI exceeds resale multiple, or market is temporarily depressed.
• • Do not sell if: trailing 12-mo is down, lease is ending in 2 years, or you have not run the unit without you for at least 12 months.