Once you start thinking seriously about selling, one of the first decisions is who leads the process. Should you hire an investment banker to sell your franchise company, or talk with buyers directly?
Both paths can work, and plenty of founders have done well with each. The right one depends on your brand, your goals, and how much of the process you want to run yourself.
Here’s a plain look at what each path involves, what it costs, and how to choose.
What Does an Investment Banker Do When You Sell?
An investment banker runs the sale for you, from preparing your story to finding buyers to negotiating the final terms. For a busy founder, that can take a lot off your plate.
A banker typically handles:
- Preparing your materials. They package your financials and your brand’s story into a document buyers can review.
- Finding buyers. They reach out to a list of potential buyers, often many at once, to create interest.
- Running the process. They set timelines, field questions, and keep conversations moving.
- Negotiating. They push for the best price and terms, and they help you compare offers side by side.
- Managing the closer look. They help coordinate document requests once a buyer starts reviewing the business.
You may also hear the term business broker. Brokers tend to work on smaller sales, while bankers usually focus on larger companies. The basic idea is the same.
What It Costs
Most bankers charge a success fee, which is a percentage of the sale price paid when the deal closes. Many also charge a retainer, an upfront or monthly fee while they work. Terms vary widely, so read the engagement letter closely. Look for how long it lasts, whether you can talk to buyers on your own, and whether you’d still owe a fee if you sell to someone later on.
Cost isn’t only money, either. A banker-led process usually means more buyers, more meetings, and more requests for information, which can take real time and attention.
What Does Selling Direct Look Like?
Selling direct means you talk with one buyer, or a small handful, without a banker in the middle. You choose who you meet, set the pace, and build the relationship yourself.
Founders often choose this path when they already have a sense of who they’d like to partner with, or when they care as much about fit as about price. It can also be quieter. Fewer people know your brand is for sale, which can make it easier to keep things confidential.
Selling direct still means having good people on your side. You’ll want:
- An experienced franchise attorney to review the offer and the final agreements.
- A trusted accountant to get your numbers ready and answer financial questions.
- A clear sense of value, so you can tell whether an offer is a healthy one. Our guide to what a healthy valuation looks like walks through what moves the number for a franchisor.
The main trade-off is comparison. With fewer buyers at the table, you’ll have fewer offers to weigh side by side. That’s why it pays to choose a buyer who’s upfront from the start, with an offer they stand behind and a quick, honest answer if the fit isn’t there.
How Do You Decide Which Path Is Right?
Start with what matters most to you: getting the most offers, or finding the right fit with the least disruption. Here’s how the two paths compare.
| Compare | Hiring a Banker | Selling Direct |
|---|---|---|
| Who runs the process | The banker | You, with your attorney and accountant |
| Number of buyers | Usually many | Usually one or a few |
| Cost | Success fee, often plus a retainer | Your own legal and accounting fees |
| Your time | Less day to day, but more meetings overall | More hands-on, with fewer meetings |
| Confidentiality | More people learn about the sale | Fewer people know |
| Best for | Founders who want the widest search | Founders who value fit and control |
A banker may be the better fit if you don’t have a buyer in mind, want to test the market broadly, or simply don’t have time to run a sale while running the business.
Selling direct may be the better fit if you’ve already met a partner you trust, want to keep the process quiet, or prefer a slower, more personal pace with one buyer at a time.
Either way, good buyers will work with you on your terms. At Pioneer Equity Partners, we’re glad to talk with founders directly or through their advisors. (If you’re an advisor, our guide for advisors and lenders explains how we work together.)
Frequently Asked Questions
Do I need an investment banker to sell my franchise company?
No. Many founders sell direct with the help of an attorney and an accountant. A banker can add reach and take work off your plate, and whether to hire one is entirely up to you.
What’s the difference between a business broker and an investment banker?
Both help owners sell their companies. Brokers usually work on smaller sales, while investment bankers tend to focus on larger businesses and more complex deals.
How are investment bankers paid?
Most are paid a success fee, a percentage of the sale price, when the deal closes. Many also charge a retainer while they work. Every agreement is different, so review the terms carefully.
Can I talk to a buyer before hiring a banker?
Yes. An early, no-pressure conversation can help you learn what buyers look for and whether a banker makes sense for you. Just check any agreements you’ve already signed first.
Will I get a lower price if I sell direct?
Not necessarily. Fewer offers means less to compare, but a buyer who knows franchising and values your brand can still offer a healthy price. Knowing what your business is worth before you talk is the best protection.
Pick the Path That Fits You
There’s no wrong answer here. Some founders love having a banker run the show, and others would rather sit down with one partner they trust. What matters is that you go in with clear goals, good advisors, and a real sense of what your brand is worth.
If you’d like to talk it through, with or without a banker in the room, we’re here.