The Next Franchise M&A Wave

PUBLISHED MARCH 2026

After two years of subdued activity, the franchise M&A market is entering an opportune window for prepared operators. Valuations have recalibrated, operators have rebuilt liquidity, and buyer demand in the 10- to 100-unit segment is showing renewed momentum.

Recent transactions show deal flow is returning as a broader shift is taking place: franchisors are increasing refranchising activity, expansion capital is stabilizing, and operators are stepping off the sidelines.

Shifting Sentiment Opening Doors

Many operators have sat on acquisition plans for years—protecting liquidity while weathering inflation shocks. Now, with borrowing costs easing from their 2023–24 peaks, they are ready to act. System-level changes are creating openings that didn’t exist even 12 months ago. Several forces are converging to make the next 12–24 months a distinct opportunity window:

• Liquidity strength: After two years of cash preservation, well-run operators have rebuilt balance sheets and are set to deploy capital.

• Recalibrating valuations: Valuations for owner-operated and capital-intensive concepts have moderated, creating buyer opportunities.

• Operator fatigue: Some owners, particularly those who navigated inflation and labor volatility without a clear succession plan, are ready to exit.

• Widening performance gap: The divergence between strong and struggling operators has accelerated, creating acquisition targets and competitive pressure to grow.

• Brand-led refranchising: Major franchisors are actively marketing units owned by struggling operators.

Based on recent activity in quick-service and fast-casual restaurants, the next M&A wave will reward operators who prepare early, understand lender expectations and have strong banking relationships.

Three Common M&A Paths

Franchise lenders typically emphasize cash-flow durability, leverage and whether an operator brings additional cash to a deal. They also look closely at growth plans to evaluate operational readiness. Here are three M&A scenarios we see most often among operators in the 10- to 100-unit range.

1. Generational transitions and family exits. Family transitions come with their own complexities. Even when operations are strong, family dynamics tend to make these deals unique. Operators who document succession plans prior to actively exploring an ownership change are better positioned to avoid surprises.

Understanding financing options is critical. Creative structures, such as staged buyout notes, can bridge gaps between buyer and seller expectations. For example, we recently worked with a family operating approximately 50 quick-service restaurants. The father was ready to exit, but the transition needed to happen gradually for financial reasons. We structured a buyout note with a portion funded upfront and the rest over 10 years.

2. Growth acquisitions. When operators expand—whether by adding units, entering new markets or absorbing another portfolio—operational readiness becomes a factor. Strong operators should assess whether their leadership and infrastructure can support added units. Expected profit ability should also be accounted for. Operators who understand their current unit-level economics, the financial profile of the stores they’re acquiring, and how the combined business will perform post-integration are best prepared to evaluate financing options.

Lenders will consider operational readiness, cash-flow durability, leverage, and the need for additional cash. If there is an expected dip in profitability, the operator should explain the “why” and present an actionable integration plan.

3. Opportunistic or distressed acquisitions. Distressed acquisitions often draw operators who see potential upside, but they aren’t always synonymous with “low cost.” These opportunities usually come with unique operational and financial considerations and may benefit from a tailored, longer-term plan.

Operators need to account for a realistic turnaround timeline, recognizing that stabilization and performance recovery typically unfold over several months. Temporary pressure on cash flows is common as teams work through staffing, operating adjustments and initial improvements.

Operators should work with their lender to outline all potential capital needs, which will help inform the broader acquisition strategy and support a smoother path to turning units around.

Beyond the transaction, lender-franchisee relationships work best when they span the entire business—from liquidity cycles and operating rhythms to vendor payments and capital needs. When banking teams understand how the organization runs day-to-day, it leads to creative solutions tailored to the business; streamlined decision-making, because they understand the business’ financial performance and risk profile; and comprehensive options beyond lending, such as treasury management, payment solutions, and wealth management.

Multi-unit franchise operators looking to expand should identify a bank that specializes in growth opportunities, offers tailored financial solutions, demonstrates industry knowledge, and provides a relationship-based approach.