RESALE DEAL KIT · FDD ITEMS 6, 17 & 20
Buying an existing MISTER SPARKY franchise
MISTER SPARKY units do come up for sale: its own FDD Item 20 shows 45 franchised outlets transferred to new owners in fiscal 2025 — 21.6% of the 208 franchised outlets open at the start of the year, and 61 across 2023–2025. The 2026 FDD sets the transfer fee at $10,000. This kit covers the franchisor's transfer terms, the resale record, a check on the asking price, and what to get from the seller.
| Term | What MISTER SPARKY's FDD says | Source |
|---|---|---|
| Transfer fee | $10,000Generally $10,000; extra fees if transferee referred by a broker or identified by franchisor | Item 6, PDF p. 21Generally, $10,000. |
| Franchisor consent standard | Prior written consent; no reasonableness standard statedThe franchisor has the right to approve all transfers. | Item 17(l), PDF p. 64We have the right to approve all transfers. |
| Franchisor right of first refusal | Yes — the franchisor can match your buyer's offerThe franchisor can match any offer that would result in a change of control, except transfers to a spouse or adult children. | Item 17(n), PDF p. 65We have the right to match any offer that would result in a change of control |
| Buyer signs the then-current agreement | Yes — the buyer signs the then-current franchise agreementThe transferee must sign the franchisor's then-current form of franchise agreement. | Item 17(m), PDF p. 65signs our then-current Franchise Agreement |
| Term the buyer gets | Not addressed in the Item 17 summary — ask, and read the franchise agreement's transfer section | Item 17, PDF pp. 61–67 |
| Remodel / upgrade at transfer | Required as a condition of transferAs a condition of transfer, the buyer must arrange to upgrade the business to the franchisor's current standards. | Item 17(m), PDF p. 65makes arrangements to upgrade the business to our current standards |
| Buyer must complete training | RequiredThe proposed transferee must successfully complete the franchisor's training. | Item 17(m), PDF p. 65successfully completes training |
| General release of claims | RequiredThe transferor must sign a release of claims against the franchisor (Exhibit D). | Item 17(m), PDF p. 62sign release of claims against us |
Item 17 is the FDD's summary of the franchise agreement. The agreement itself controls, and a resale buyer usually signs the franchisor's current one, so check these terms against the FDD you will actually be given. Software read each value from the filing text, and each quote was matched back to that text. Values we could not match are left out, not guessed.
| Fiscal year | Transfers | % of franchised units | Exits | Reacquired | Franchised at start |
|---|---|---|---|---|---|
| 2023 | 11 | 7.9% | 6 | 0 | 139 |
| 2024 | 5 | 3.0% | 4 | 0 | 164 |
| 2025 | 45 | 21.6% | 11 | 0 | 208 |
A transfer is an owner selling a unit that keeps operating. An exit is a unit that left the system. Item 20 doesn't say why any unit left or what any unit sold for. In MISTER SPARKY's latest year, transfers ran well ahead of exits, which fits owners finding buyers rather than handing units back. Reacquisitions (0 in fiscal 2025) are the franchisor buying units back. Ask whether that was strategy or a rescue. A location that has changed hands repeatedly is the classic churning pattern, so ask how many owners yours has had and call the last one. Former franchisees are listed in the FDD exhibits.
Financing assumptions (change to your lender's terms)
- Equity default: SBA SOP 50 10 (version 8 onward, now 8.1): minimum 10% equity injection on a complete change of ownership, of which a seller note on full standby can cover part. Lenders often ask for more. SBA SOP 50 10
- Rate and term default: 9.49% (shown rounded) is the median initial rate on 10-year SBA 7(a) loans to franchise brands approved FY2026 (Oct 2025 – Jun 2026, n = 2,206), from SBA loan-level data. Most 7(a) rates float with Prime, so use your lender's quote.
Enter the asking price to start. Nothing you type leaves this page.
This estimate is computed by software from the brand's public filings and any inputs you enter. No CPA prepared it for you and no assurance is provided on it. Actual results will differ, and the differences may be material.
- Three years of P&Ls and the matching federal tax returns. Monthly or quarterly P&Ls plus the business returns for the same years. If the returns show less profit than the P&Ls, the returns are usually closer to the truth.
- The royalty and sales reports filed with MISTER SPARKY. The seller paid royalties on this revenue, which makes it the hardest number in the deal to inflate. It should tie to the P&L top line.
- Bank statements for the same period. Deposits are the third check on revenue, and they show cash a P&L can hide.
- The add-back schedule behind the “owner benefit” or SDE figure. List every add-back with its support. For each one, ask whether the cost will exist for you. A manager you'll have to hire is a cost, not an add-back.
- Every notice from the franchisor: defaults, cures, inspections and audits. Ask for three years of them. An open default can block the transfer or become your problem the day you close.
- The lease, all amendments, and the landlord's consent terms. You need the remaining term and renewal options, any rent steps, and the personal guarantee that assignment may require of you.
- Equipment list with ages, plus any equipment leases and liens. Run a UCC lien search. Note what the franchisor will make you replace at transfer.
- Payroll records and the staff roster. Who is staying, at what wage, and whether the seller's own unpaid hours are propping up the margin.
- The seller's franchise agreement and amendments. Check the remaining term and any side letters, discounts or territory rights. These often don't carry over to a buyer.
- The current MISTER SPARKY FDD and the agreement you will sign. A resale buyer still gets an FDD, and usually signs today's agreement. Its royalty, fees and territory terms can differ from the seller's.
Ask the seller
- Why are you selling, and when did you decide?Then ask neighbouring owners and the franchisor the same question. The answers should match.
- How many owners has this location had, and who did you buy it from?If it has changed hands repeatedly, call the earlier owners.
- Has the franchisor sent you any default, cure or compliance notice in the last three years?Get copies. Ask if anything is open today.
- Do the P&Ls tie to the tax returns and the royalty reports, year by year? If not, why not?
- How many hours a week do you work in the business, and in which roles?If you won't fill those roles yourself, that labour is a cost.
- Will you carry a seller note, and will you stay on for a transition period?Under SBA rules a seller note can count toward your equity only if it is on full standby.
Ask MISTER SPARKY (the franchisor)
- Please confirm in writing the transfer fee and every condition you will set for this transfer.The 2026 FDD summary is a starting point. The conditions that bind you are the ones the franchisor sets for this deal.
- Send me the current franchise agreement I would sign, and list how it differs from the seller's: royalty, ad fund, technology fees, territory and term.MISTER SPARKY's FDD says the buyer signs the then-current agreement, so the seller's economics may not transfer.
- What term will I get: the remainder of the seller's, or a new full term? What will renewal require?
- List in writing every remodel, upgrade or equipment replacement you will require at transfer, with a cost estimate.The FDD makes upgrades a condition of transfer. Negotiate that cost into the price, or make the seller do the work before closing.
- Will you waive your right of first refusal on this deal? If not, how long do you have to decide?MISTER SPARKY can step in and buy the unit on your terms. Your diligence spend is at risk until that window closes.
- When and where is the training I must complete, what does it cost, and can the sale close before I finish it?
- Is this unit in good standing today: royalties current, no open defaults, no pending audit?
- How many units resold in the last three years, and at what prices or multiples?Item 20 counts transfers, but not prices.
- Is a new unit, or a non-traditional location, planned inside or next to this territory?
Ask other owners and the previous owner
- Call the previous owner of this location, if the seller isn't the first: why did they sell?
- Ask recent resale buyers: did the transfer go as the FDD describes? How long did approval take, and were there surprise upgrade costs?
- Ask owners nearby what units like this one actually sold for, and what they clear after debt service.
SBA 7(a) loans finance franchise resales routinely. The bank underwrites the unit's real historicals rather than a projection. MISTER SPARKY's SBA loans are too few, or too recent, to compare with franchise loans made in the same years. Your lender will be underwriting the unit and you more than the brand.
The Deal Review on a resale ties three years of the seller's P&Ls to the tax returns and the royalty reports, tests every add-back in the “owner benefit” figure, and works out what the unit clears after your debt service. It is an analysis. It is not an audit, a review or a quality-of-earnings attestation. Start with the free call. It is an educational session, not an engagement.
Talk through a resale →For comparison, the franchisor's Item 7 estimate to open a new MISTER SPARKY is $133K–$277K (2026 FDD). Cost breakdown →
The MISTER SPARKY validation checklist
questions built from this brand's own filings · read them all on the profile
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A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing MISTER SPARKY’s numbers, including talking you out of a bad deal.