Refresh obligation

Definition

The franchisor's right to make you rebuild the store on its own schedule.

Why It Matters

It is the largest number in a franchise resale that appears on no financial statement. The agreement usually lets the brand require a remodel on a cycle, on renewal, or as a condition of approving the transfer itself, and the last of those lands on the buyer in the first year, not on the seller in the last. A store that looks tired is not a bargaining chip; it is a bill somebody is about to receive. Ask what the current agreement requires, when the store was last done, and whether approval of this sale is being conditioned on doing it.

In numbers: A brand conditioning its approval on a refresh can add six figures to a $4M purchase before the doors reopen, and none of it appears in the earnings you priced.