Latest / Franchise Conversations with Fexingo: Buying, Running, and Scaling Franchise Businesses
How Franchisees Use Earnouts to Buy Existing Units
When buying an existing franchise unit, the biggest risk is overpaying for goodwill that walks out the door with the previous owner. Lucas and Luna unpack the earnout structure — a deal mechanism where part of the purchase price is tied to post-sale performance. They walk through a concrete example: a multi-unit operator buying three quick-service locations from a retiring franchisee. The earnout pays the seller an additional $50,000 per unit if same-store sales hold above a 3 percent year-over-year growth threshold for 18 months. The hosts explain how earnouts bridge the valuation gap…
The skinny
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