Carta vs Forge When Your Franchisor Has a Veto Neither Platform Can Touch

Franchise agreements almost universally require franchisor consent before any transfer of ownership interest in the franchisee entity, and in a multi-unit portfolio held across several LLCs, that consent requirement typically applies separately to each unit's franchise agreement, not once at a portfolio level. Before pricing the buyout, contact the franchisor to understand its consent process, required documentation, and typical timeline, since this can meaningfully affect how you sequence the transaction.

Once franchisor consent is confirmed or in process for each affected unit, Carta's tender offer mechanics can formalize the buyback of the passive investor's interest in each entity and keep records clean across the portfolio. It has no role in the franchisor consent process itself; that runs entirely through the franchise agreement's own procedures.

Beyond the fact that Forge's outside buyer network is built around companies already recognizable to institutional secondary buyers, mostly venture-backed technology names, a franchisor's consent right over ownership transfers would apply to any buyer regardless of how they were sourced. There's no realistic scenario where an outside marketplace transaction bypasses a franchisor's contractual consent rights.

A note paid down from unit-level cash flow, structured separately for each LLC rather than as one blended portfolio payment, generally aligns better with how franchisors evaluate these transactions and how the underlying units actually generate cash. It also gives you flexibility if consent comes through for some units before others, letting you close in stages rather than waiting on the slowest approval.

Most franchisors want financial statements for the buying party, sometimes a background check or credit review, confirmation the buyer meets any operational standards the franchise agreement specifies, and often a transfer fee. Pull together this package for each unit as early as possible, since gathering the same documentation repeatedly, unit by unit, is one of the more tedious parts of a multi-unit transition and starting early avoids it becoming the bottleneck.

Assemble this package for each unit's franchise agreement:

• Current financial statements for the buying party, covering the entity that will hold the interest.
• A background check or credit review, which many franchisors also ask for.
• Confirmation that the buyer meets any operational standards the franchise agreement specifies.
• The transfer fee, which franchisors often require along with the rest of the package.

Budget six to ten weeks total, since franchisor consent per unit typically takes two to four weeks once a complete package is submitted, and submitting packages for several units at once, rather than sequentially, is the main way to compress the overall timeline. Structure the buyout so units can close as their individual consents come through, rather than waiting for every unit to be approved before closing any of them.

The most common mistake is submitting a franchisor consent request for only some units in the portfolio, assuming approval for one location implies approval for all, when franchise agreements almost always require separate consent per unit. Say consent is granted quickly for two units but a third, in a different territory with a different local franchisee representative, takes much longer or raises a question the first two didn't. Treating the whole portfolio as one approval leads to a false sense that the transaction is nearly done when a meaningful piece is still pending.

Track and submit consent requests for every unit individually, from the start. Keep a simple status tracker across every unit in the portfolio, showing submission date, current status, and any outstanding questions from the franchisor, so it's clear at a glance which units are genuinely ready to close and which are still pending, rather than treating the whole portfolio as one undifferentiated status.

Structure the buyout so payment is tied to each unit's individual franchisor consent, rather than as one lump sum contingent on every unit closing simultaneously, so a delay on one unit doesn't hold up payment for units that are already fully approved and ready to close. This also reduces the operating partner's financing burden by spreading the cash outlay across the actual consent timeline rather than requiring it all at once.

Also negotiate who bears any transfer fee or other cost the franchisor charges as part of its consent process for each unit, since these fees can add up meaningfully across a multi-unit portfolio and it's worth agreeing upfront rather than assuming one side will simply absorb them all.