Buying a franchise store?

A franchise resale — buying an established franchise unit from an existing franchisee rather than taking a new territory from a franchisor — is one of the most fundable business acquisitions available. The brand is established, the systems are proven, the customer base is already trading, and the franchisor has a direct commercial interest in the new franchisee succeeding. Specialist lenders with franchise sector appetite understand this model well and advance against it with confidence — provided the franchise agreement, the unit's trading performance, and the franchisor's approval of the incoming franchisee are all in order.

What lenders look at

Unit trading performance is the foundation. Lenders will examine the unit's weekly or monthly sales figures, the gross margin, and the net profit after royalty fees, marketing levies, and other franchise obligations. Franchise units are assessed on their own trading performance rather than on the franchisor's network averages — a strong-performing unit in a good location is assessed on its own merits. Lenders will also examine the consistency of trading performance over the past two to three years and whether sales trends are stable, growing, or declining.

The franchise agreement and its terms are reviewed carefully. Lenders will examine the remaining term of the franchise agreement, the royalty fee structure, the marketing levy, any minimum sales obligations, and the renewal terms available to the incoming franchisee. A franchise agreement with a long remaining term — or a clear right to renew on reasonable terms — is a more fundable proposition than one approaching expiry without confirmed renewal rights. The transfer fee payable to the franchisor on resale is also assessed as it forms part of the total acquisition cost.

Franchisor approval of the incoming franchisee is central to the underwriting. The franchisor must approve any transfer of a franchise unit to a new owner — this typically involves an application, an interview, background checks, and training requirements. Lenders familiar with franchise acquisitions understand this process and factor the timeline into the deal structure. A buyer who has already initiated the franchisor approval process — or who meets the franchisor's published franchisee profile — is in a materially stronger position than one who has not yet engaged with the franchisor. The funding cannot complete until franchisor approval is confirmed.

Refit obligations and capital expenditure requirements are assessed alongside the acquisition cost. Many franchise agreements include periodic refit or upgrade obligations — the franchisee is required to update the unit's fit-out, signage, or equipment to the franchisor's current brand standards at specified intervals. Lenders will want to understand whether any refit obligation is imminent, the estimated cost, and how it will be funded. A unit with a recently completed refit is a stronger proposition than one approaching a major brand upgrade requirement that will add significant capital cost in the near term.

How we help

We are acquisition finance and loans brokers, not lenders. We package your application, present it to the funders with genuine franchise sector appetite, and manage the process from first conversation through to completion.

We also arrange government-backed facilities for franchise store acquisitions — helping buyers access up to £2 million toward their purchase where the criteria are met.

Every franchise acquisition is different. Tell us about the business. We will take it from there.