The Aging-Owner Wave, and What It Means for Your Franchise Timeline

The Aging-Owner Wave, and What It Means for Your Franchise Timeline

More than half of small-business owners in the U.S. are now over 55, according to McKinsey's 2026 research on ownership transfer. That is the aging-owner wave: a large group of owners reaching exit age in the same years. If you own a franchise, the wave is context for your decision, not a deadline for it. The same research says that few small businesses that reach the point of exit end in a sale, and what moves your own timeline is how ready you are when you choose. That part is yours.

What is the aging-owner wave, and does it include franchise owners?

It is the group of small-business owners reaching exit age at the same time, and franchise owners are part of it as small-business owners, though the figures below do not separate franchisees from everyone else.

McKinsey Institute for Economic Mobility, in its 2026 report "The Great Ownership Transfer: A New Era of Business Stewardship", reports that baby boomers own nearly a quarter of all small businesses. More than half of small-business owners are over 55, up from roughly 30% in 2002, and one in four is 65 or older. By 2035, roughly six million small and medium-sized businesses are expected to face a small business ownership transition.

If so many owners are exiting, why do so few sell?

McKinsey estimates that of the small and medium-sized businesses that exited the market in 2022, 92% closed, about 5% were completed as a sale and 3% passed to new owners, often family members.

That is an outcome, not a cause. The split covers every kind of small business, including ones with nothing a buyer could take over, so it cannot tell you how a franchise resale fares. In our view, for a franchise the readiness question starts earlier, because a buyer has to clear franchisor approval before a deal can close, and a sale on a deadline is a poor moment to learn what that involves.

What are owners aged 55 and over actually planning?

Gallup's Pathways to Wealth Survey found that owners 55 or older were more likely than younger owners to plan a sale or transfer in the next five years, 17% against 10%, and that most owners with employees plan to sell, hand over or take public their business, against far fewer owners without employees.

The detail, from Gallup's report published March 24, 2025, based on Year 2 of the Gallup Pathways to Wealth Survey, completed between September 20 and October 28, 2024, with 1,264 respondents in the succession analysis: "Among employers, 74% plan to either sell/take public or give away their business", against "just 35%" of nonemployer businesses. Owners 55 or older were more likely than younger owners to report plans for selling or transferring the business in the next five years, 17% against 10%. For long-term plans, Gallup says age has little bearing, except that younger owners are more uncertain.

Two limits travel with those numbers. Gallup surveys all small-business owners, not franchisees, and it measures what owners intend, not what happens. It cannot show that having a plan changes the outcome.

Does a bigger wave of sellers change my own timeline?

Not in any way that has been measured. The studies of the wave count owners; they do not track franchise prices or how long a sale takes.

What we can say is where your timeline is set. It is set by your own agreement: how much of the term remains, when renewal falls, and what your franchisor must approve. Remaining term and renewal timing can affect value and timing. Item 17 of the Franchise Disclosure Document shows what to look for in your agreement: the length of the term, renewal or extension and the requirements to renew (rows (a) to (c)), and transfer, franchisor approval, its conditions and the right of first refusal (rows (k) to (n)) (16 CFR 436.5(q)).

What rates and buyer demand are doing now is a different question from the wave, and we take it up in whether now is a good time to sell your franchise.

What can a franchise owner control while the wave runs?

Readiness, and nothing about the wave itself. Three things are yours to settle before you decide anything:

• The dates. Find the length of your term, your renewal date and the transfer rows in your agreement and read them.
• The approval. Know what your franchisor must approve and what a buyer has to show. Franchisor approval is part of every franchise sale.
• The value. Know what the business is worth today, not what a rule of thumb or an old figure in your head says. If you expect a buyer to see a different value, read why a franchise valuation feels off before you meet one.

If you own several units, think of the portfolio. Each unit may sit under its own agreement with its own term and renewal date, so the dates can arrive one at a time. There is no general rule for how a franchisor handles a group sale; the answer comes from the agreements, and a franchise attorney is the person to read them with you. We are not that person.

How do I find out where I stand?

Ask for a free Opinion of Value. It is a personal valuation page with a custom video walkthrough recorded by a senior advisor, free with no card on file, and it commits you to nothing. You can look at the value, keep running the franchise and decide later. Confidentiality is available throughout, so staff, customers and competitors need not know.

You do not have to sell to ask. Request your Opinion of Value on your timeline, which is not the wave's.

Frequently asked questions

A note on the figures

The figures in this article come from McKinsey's and Gallup's research on small-business owners as a whole. Neither separates franchise owners, so read them as the picture for small businesses in general, not a measure of franchise resales.