Restructure
60%
lower daily payment
Franchise Debt Relief
Workouts for franchisees caught between the franchisor and their lenders
Multi-unit operators, single-store owners, and emerging franchisees with SBA loans, equipment financing, royalty arrears, and personal guarantees. Specialized in franchise-system economics.
QSR
quick-service
MULTI
multi-unit
ROYALTY
arrears workouts
SBA
franchise loans
THE PROBLEM
Franchisees face two lenders at once
FRANCHISE WORKOUT
5-unit QSR · $1.8M
Royalties + SBA workout · operator retained
These two creditors don't talk to each other — but the workouts are interlocked.
A struggling franchisee is fighting on two fronts. One side: bank or SBA lender on the unit financing. Other side: the franchisor, with royalty arrears, marketing fund obligations, and termination leverage on the franchise agreement itself.
These two creditors don't talk to each other — but the workouts are interlocked. A bank won't restructure without confirmation the franchise agreement is intact; the franchisor won't cure royalties unless the unit financing is current.
We work both sides simultaneously. That's the only way it actually closes.
WHAT WE HANDLE
6 scenarios, opened up
01
Negotiate cure schedules, deferral agreements, and reduced royalty terms with franchisor finance teams.
How we run it
- 01Confirm royalty arrears + ad fund balance
- 02Negotiate cure schedule with franchisor finance
- 03Document deferral or reduction terms
- 04Reinstate FA in good standing
Typical outcome
Avg outcome: arrears cured over 12–24 months
02
OIC, hardship modifications, and PG defense on the SBA financing tied to the unit.
How we run it
- 01Confirm SBA loan stage (lender / SBA / Treasury)
- 02Build hardship package per stage
- 03Negotiate OIC, modification, or charge-off terms
- 04Close out with documented release
Typical outcome
Avg outcome: SBA settled at 15–40% of balance
03
When some units are healthy and others aren't, restructure across the portfolio rather than unit-by-unit.
How we run it
- 01Audit each unit P&L
- 02Identify keepers vs. closers vs. sale candidates
- 03Sequence lender + franchisor work per unit
- 04Execute portfolio plan
Typical outcome
Avg outcome: 50–80% of units retained or sold cleanly
04
POS, kitchen equipment, and FF&E workouts — including surrender vs. retain analysis.
How we run it
- 01Inventory all equipment finance contracts
- 02Determine surrender vs. retain per asset
- 03Negotiate modifications or returns
- 04Close out deficiency exposure
Typical outcome
Avg outcome: critical equipment retained, deficiencies capped
05
Defend against termination notices and cure default claims under the FA.
How we run it
- 01Receive termination notice, calendar cure period
- 02Build cure plan with franchisor finance
- 03Negotiate reinstatement terms
- 04Document cure and reinstatement
Typical outcome
Avg outcome: termination rescinded, FA reinstated
06
Position the unit for a managed sale to a qualified franchisee with full system approval.
How we run it
- 01Position unit for system-approved sale
- 02Identify qualified franchisee buyers
- 03Manage franchisor approval process
- 04Close sale, payoff lender + arrears
Typical outcome
Avg outcome: clean exit, PGs released at close
“
FROM THE DESK
A franchisee in distress is fighting two negotiations at once — the lender on unit financing and the franchisor on royalties. They are interlocked. Working them in isolation is how franchisees lose the unit.
Our process
From
same-day
intake
to
closeout
Most cases hit resolution between months 3 and 6. We move on day one because deadlines don't wait.
01
Pull the FDD, franchise agreement, royalty ledger, MCA contracts (if any), and operations notice from franchisor. Map cure-period deadlines and termination triggers.
FDD · Franchise agreement · Royalty ledger · Operations notice
02
Open dialogue with franchisor BEFORE termination notice issues. Stabilize MCA daily debits, vendor accounts, and payroll while we work the broader picture.
Franchisor outreach · MCA standstill · Vendor stabilization
03
Negotiate royalty arrears with franchisor, MCA settlements with funders, vendor terms with suppliers — coordinated so concessions in one position do not collapse another.
Royalty workout · MCA settlement · Vendor terms
04
Signed agreements across creditors, franchise unit retained where possible, or controlled exit with deficiency carve-outs documented.
Final agreements · Unit retention · Controlled exit
“Delancey Street walked us through every step. The settlement saved the business — and our credit.”
WHERE WE WORK
Franchise Debt Relief cases in all 50 states
FAQ
Common questions
Will the franchisor work with me?
In the vast majority of cases, yes. Franchisors prefer a working unit on a cure plan to a closed unit and a re-franchising effort. The conversation has to be approached correctly — with documentation and a credible plan — but the incentives align.
What if my franchisor has already sent a termination notice?
Don't panic. Termination notices typically include a cure period, and we routinely negotiate cure-and-reinstate outcomes even after notice. Time matters — call as soon as you receive it.
Can I sell the unit instead?
Yes, and sometimes that's the right answer. We position units for franchise resale, manage franchisor approval, and structure deals so the proceeds clear the SBA loan and royalty arrears in one close.
Multi-unit operator, some stores profitable?
Common scenario. The strategy is rarely uniform — usually some units restructure, some are sold, and some close. We build the portfolio plan and execute against it.
My SBA loan and franchisor are both pressing. Who first?
Depends on the timing. Generally we stabilize the franchise agreement first (so the lender knows the unit is operating) and then restructure the SBA debt against that stable base. We sequence based on your specific facts.
RESOURCES
Read more on franchise debt relief
Guide
Negotiation flow
1 Demand
2 Counter
3 Term sheet
4 Settled
How does business debt settlement work?
Step-by-step explanation of the negotiation, timeline, and what changes for your business.
Read article
Defense
VS
Fight
$0
if you win
When to settle vs. when to fight
Not every creditor responds to negotiation. Here's how to read the situation.
Read article
Strategy
Avg. payment reduction
54%
Best business debt settlement companies (2026)
How we compare on track record, pricing, and outcomes.
Read article
GET IN TOUCH
Talk to a strategist about your franchise debt relief case
Free initial review. We'll look at your contracts, the creditor mix, and what's actually triggerable in the next 30 days. No commitment, no sales pitch — just a real read on your situation.
Direct line
212-210-1851
Picked up by an actual case manager — no phone tree.
Email
info@delanceystreet.com
Replies within 4 business hours, 24/7 for COJ emergencies.
Confidential intake
Encrypted document upload
For uploading contracts, UCC notices, and bank statements.
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