Do I need the landlord’s approval as well as the franchisor’s?

A franchise resale has two gatekeepers and buyers routinely budget time for only one. The franchisor is the visible one, because it is the party everyone is talking to. The landlord is the one that quietly determines whether the deal closes on schedule.

Two consents, two sets of criteria

The franchisor is assessing whether you can run the system — capital, experience, training, willingness to operate hands-on. The landlord is assessing whether you can pay rent for the remaining term — covenant strength, financial statements, often a personal guarantee. A buyer can comfortably satisfy one and fail the other, and strong franchise credentials carry no weight with a landlord looking at your balance sheet.

Where the franchisor holds the lease

Some systems head-lease the premises and sublease to the franchisee. That can simplify matters, because the franchisor controls both consents — or complicate them, because a franchisor unwilling to approve you now holds two reasons to refuse. Establish early which structure your location uses; it changes who you need to persuade.

Remaining lease term is its own problem

A lease with two years left and a franchise agreement with eight is a mismatch the buyer inherits. Landlord consent to the assignment and negotiation of an extension are separate conversations, and doing them at once gives the landlord leverage it would not otherwise have. Buyers often find the extension, not the assignment, is the harder of the two.

Make the purchase conditional on both

The purchase agreement should be conditional on obtaining both consents, with a realistic outside date. A condition naming only franchisor approval leaves a buyer bound to complete a purchase of a business it may have no right to occupy the premises for.