What happens when the franchisor inspects my fast food restaurant before a sale?

When a franchise changes hands, the brand often wants to see the restaurant before it approves the new owner. For a seller this visit works like an audit. Knowing what the visitor looks at, and preparing the unit and the paperwork ahead of time, may help the process go more smoothly.

What the visitor usually looks at

Expect attention to the exterior and signage, the dining room, the kitchen, equipment condition, cleanliness, food handling and the drive-thru if there is one. Some brands also check uniforms, menu boards and the technology. Ask the franchisor for its current standards in advance, and compare them honestly against what you see when you walk the restaurant.

The list of items to fix

The visit often ends with a written list. Some items are small, such as a cracked tile. Others, such as an equipment package or a refresh of the interior, can be costly and slow. Ask which items are conditions of approval and which can be handled after closing. Ask for the list in writing and keep your own copy.

Who fixes and who pays

This is a matter for negotiation between you and the buyer, and the franchisor’s position matters too. Some sellers complete the repairs, some give the buyer an allowance and some leave the work to the buyer. Have your lawyer record the arrangement item by item. The page on renovating a franchise resale is the buyer’s view of the same question.

Protecting the closing date

Delays usually come from long-lead items and slow communication. Order anything with a wait as soon as you know about it, keep the buyer, lender and franchisor informed, and ask the franchisor to confirm in writing when an item is accepted as complete.