Evening Education Series: Franchise Recruitment Essentials

April 29, 2025

Education

Managing Franchise Resales

Note: The quiz questions were selected from the Managing Franchise Resales webinar, held on July 13-14, 2026. You must achieve 70% or more to receive a Certificate of Completion and earn the 200 CFE Education credits and 50 participation credits.

1 / 10

What is a network resale ratio?

The proportion of franchise outlets currently up for sale;

The proportion of franchise outlets previously sold;

The proportion of company-owned outlets currently up for sale;

The proportion of unopened outlets already sold

2 / 10

What is not an incentive that can accelerate a resale?

Reducing separation payment;

Sell or be terminated ultimatum;

Peer pressure by existing franchisees;

Renewing for another term without the franchisee’s commitment to sell.

3 / 10

What is the purpose of a Notice of Intention to Sell?

To confirm that the business is for sale and outline buyer expectations;

To confirm that the business is for sale and outline seller expectations;

To confirm that the business is for sale and outline franchisor expectations;

To confirm that business is not in breach of its franchise agreement obligations.

4 / 10

What should be the role of a business broker in the sale process?

A mentor to the franchisee during the sales process;

A resource to augment the franchisor’s own recruitment activities;

A facilitator to help value, list and promote the business for sale;

All of the above

5 / 10

What is the most common type of business valuation?

The amount of money the franchisee needs to get out of debt;

Market-based valuation;

Asset-based valuation;

Earnings-based valuation.

6 / 10

What is an Information Memorandum?

The financial statements of the business for sale;

The franchisor’s contact records about the franchisee who is selling their business;

A bank’s assessment of the future prospects of the business to be sold;

A snapshot of the business to be sold, like a reverse business plan.

7 / 10

What should a seller not do in preparing their business for sale?

Ensure full compliance with their obligations under the franchise agreement;

Take even more money out of the business;

Ensure all marketing activities continue to be done;

Review and/or renew lease (if a operating from a fixed site);

8 / 10

Which of the following may not be a reasonable basis for a franchisor to reject a franchisee’s buyer?

If the buyer doesn’t meet the franchisor’s selection criteria;

If the buyer doesn’t agree to comply with the franchise agreement;;

If the buyer has previously worked for another franchisee of the same brand;

If the buyer can’t complete the sale.

9 / 10

Describe the first right of refusal process.

The franchisor can refuse the franchisee’s request to sell under any circumstances.

The franchisor can buy the franchisee’s business any time for any reason;

The franchisor can only buy the franchisee’s business if there is already another buyer;

The franchisor can buy the franchisee’s business when first offered to them, or again if another buyer has been found (and on the same terms);

10 / 10

What is the purpose of a restraint of trade?

To prevent the seller opening a new franchise under the same brand;

To prevent the seller opening a competing business;

To prevent the buyer from acquiring additional outlets;

To prevent the buyer ever selling their business.

Your score is

The Canadian Franchise Association (CFA) helps everyday Canadians realize the dream of building their own business through the power of franchising. The CFA advocates on issues that impact this dream on behalf of approximately 650 members and over 40,000 franchisees from many of Canada’s best-known and emerging franchise brands. Beyond its role as the voice of the franchise industry, CFA strengthens and develops franchising by delivering best-practice education and creating rewarding connections between Canadians and the opportunities in franchising. Franchising is the 12th largest industry in Canada and franchised businesses contribute almost $150 billion per year to the Canadian economy, creating jobs for almost two million Canadians.