A Q u a r t e r l y D i g i t a l P u b l i c a t i o n o f t h e I n t e r n a t i o n a l B u s i n e s s B r o k e r s A s s o c i a t i o n
T H E B E S T I N S I G H T S O N B U Y I N G A N D S E L L I N G S M A L L B U S I N E S S E S
By James Parker,
2026 IBBA Chair
Summer 2026
The insights and opinions expressed herein are those of the authors and do not represent professional counsel nor an endorsement by the IBBA.
Plus Insights on:
+ Selling Businesses With Bad Financials
+ Former IBBA Chairman Fred Zirkle’s New Book
Reveals How To Create a Purposeful Life
+ Navigating the Minefield: Critical Pitfalls
in Restaurant Franchise M&A
+ When the Broker Becomes the Seller
+ Legislative Update and More!
What Makes the IBBA
Different
SUMMER 2026
The best insights
on buying and selling
small businesses
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10
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22
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LETTER FROM THE CHAIR
SELLING BUSINESSES WITH BAD FINANCIALS
FORMER IBBA CHAIRMAN FRED ZIRKLE’S NEW BOOK
REVEALS HOW TO CREATE A PURPOSEFUL LIFE
NAVIGATING THE MINEFIELD: CRITICAL PITFALLS
IN RESTAURANT FRANCHISE M&A
WHEN THE BROKER BECOMES THE SELLER: LESSONS FROM
BUILDING AND EXITING A BUSINESS BROKERAGE BRAND
THE STATE-LINE TRAP: WHY THE FEDERAL M&A BROKER
EXEMPTION IS NOT THE FINISH LINE
LEGISLATIVE UPDATE
In this Issue
SUMMER 2026
REFLECTIONS ON THE 2026 ANNUAL
CONFERENCE AND THE CULTURE THAT SETS
OUR PROFESSION APART
Dear IBBA Members,
One of the privileges of serving as Chair is getting to
see our conference from a different perspective.
You see the energy in the room before the first session
begins. You hear the feedback in the hallways. You
meet first-time attendees who are trying to find
their place. You spend time with members who
have been part of this association for decades. You
watch speakers, instructors, sponsors, exhibitors,
volunteers, committee members, staff, and attendees
all contribute in different ways to something much
bigger than any one person.
As I reflect on the 2026 IBBA Annual Conference, I
find myself incredibly grateful.
Certainly, there was a great deal to celebrate. The
educational content was exceptional. The feedback I
heard regarding Friday’s classes and the workshops
throughout the weekend was overwhelmingly
positive. Many members told me it was one of the
strongest educational lineups they could remember.
Our keynote speaker, Noelle Pikus Pace, delivered
a powerful message about perseverance, resilience,
sacrifice, and determination that resonated deeply
throughout the conference. Trent Lee’s presentation
was extraordinary, not only because of what he
has accomplished, but because of his willingness
to openly share the systems, strategies, and lessons
that helped him become the IBBA’s top producer for
eight consecutive years. The Top Performers Panel
provided practical, real-world insights from some of
the most accomplished professionals in our industry.
To every speaker and instructor who gave their time,
experience, and knowledge, thank you. You helped
raise the standard for everyone in attendance.
But as memorable as those moments were, what left
the greatest impression on me was not limited to
what happened on stage or inside a classroom.
It was what happened throughout the conference.
JAMES PARKER
CBI, MCBI, M&AMI | 2026 IBBA Chair
What Makes
the IBBA Different
It was in the hallways, at meals, between sessions,
during networking events, and in the conversations
that continued long after the formal agenda
ended. It was experienced brokers taking time to
answer questions from newer members. It was
successful professionals sharing ideas they spent
years developing. It was introductions being made,
relationships being formed, and members helping one
another simply because that is who they are.
Several first-time attendees told me they were amazed
by how welcoming everyone was. Many arrived
knowing very few people. Within hours, they found
themselves surrounded by members willing to
answer questions, share experiences, offer advice, and
make introductions.
That does not happen in every organization.
In many professions, knowledge is guarded.
Relationships are protected. Competitive advantages
are carefully held close. Yet year after year, I watch
IBBA members choose a different path.
They share.
They teach.
They mentor.
They collaborate.
They lift one another up.
And because they do, our entire profession becomes
stronger.
Throughout the weekend, I found myself thinking
about a theme I touched on during my opening
remarks. The standard in every profession continues
to evolve. Technology changes. Markets change. Buyer
expectations change. Seller expectations change.
The people who thrive are not simply the people with
the most experience. They are the people willing to
continue learning, adapting, and improving.
That mindset was on full display at this conference.
Every classroom was filled with professionals
investing in themselves. Every workshop represented
a willingness to learn. Every presentation challenged
us to think bigger, sharpen our skills, and raise our
standards. Every conversation created an opportunity
for growth.
But what makes the IBBA so special is that our
members are not simply trying to evolve alone.
They are bringing others with them.
That may be the most powerful part of our culture.
Every successful association can hold a conference.
Many can offer certifications. Many can provide
education. What separates the IBBA is not only what
we offer. It is how our members show up for one
another.
It is the willingness to share an idea, answer a
question, make an introduction, or help someone avoid
a mistake that may have taken years to learn.
LETTER FROM THE CHAIR
SUMMER 2026
That spirit cannot be mandated.
It cannot be forced.
It cannot be manufactured.
It can only be lived.
And this conference reminded me that our members
live it every day.
One of my favorite memories was walking through
the networking events and seeing members gathered
together, sharing stories, exchanging ideas, laughing,
and enjoying one another’s company. Saturday
evening was a perfect example. The bar room was
packed, conversations were flowing, relationships
were being built, and for a few hours, it felt less like
an industry conference and more like a reunion of
friends.
That is the IBBA at its best.
Long after presentations are forgotten and conference
materials are put away, people remember how
they were treated. They remember who welcomed
them. They remember who encouraged them. They
remember who took the time to help.
Many of us can trace important moments in our
careers back to a single introduction, a single mentor,
or a single conversation that changed our trajectory.
I have no doubt that moments like that occurred
countless times throughout this conference.
As Chair, I could not be more grateful for the culture
each of you helps create.
Thank you for investing in yourself.
Thank you for sharing your knowledge.
Thank you for mentoring others.
Thank you for welcoming new members.
Thank you to our speakers, instructors, sponsors,
exhibitors, volunteers, committee members, staff, and
everyone who helped make this event so meaningful.
Most of all, thank you for demonstrating, year after
year, that success and generosity can coexist.
The conference may be over, but the relationships,
ideas, and momentum created over those few days
will continue long after we have all returned home.
As I left the conference, I was not thinking only about
the sessions, the workshops, or the notes we all took.
I was thinking about the people. Conversations.
Friendships. The pride I felt watching this association
live out its values in real time.
Most of all, thank you for demonstrating, year after
year, that success and generosity can coexist.
SUMMER 2026
And if there is one thing I wish were different, it is
this, I wish I did not have to wait another year to see
all of you again.
Until then, continue learning, continue growing,
continue helping one another.
Because the future of our profession is brighter when
we build it together.
JAMES PARKER | CBI, MCBI, M&AMI, CM&AP
CHAIR, 2026 IBBA BOARD OF GOVERNORS
The IBBA: Over 3,000+
Members Strong, and Climbing!
You Belong Here
JOIN THE IBBA
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LISTEN IN
SUMMER 2026
Selling Businesses
With Bad Financials
JEFFREY D. JONES
CBI
11
It is unfortunate but true that approximately
65% of small businesses do not have good
financials that properly reflect gross income,
operating expenses, and net profit. This creates
many negative issues when it comes time to sell
the business. The question is whether or not the
business is salable.
So when a business owner makes the decision to
sell their business, they have major problems that
include:
1. Providing tax returns that do not properly
reflect gross income which could run the risk of
a buyer Reporting false tax returns to the IRS.
2. Buyers will not be able to obtain bank
financing as they all require at least two years
of tax returns reflecting sufficient cash flow to
pay the buyer a reasonable salary and pay the
bank note.
3. The inability to prove business profitability to a
prospective buyer.
4. The inability to provide good financials creates
buyer mistrust.
5. Unable to properly determine and support an
asking price for the business.
From a Business Broker prospective, when a
business owner wants to list their business, the
broker has to make a decision wheather or not to
take the listing. The incentives to take the listing
include:
• There is a motivated seller.
• There is the opportunity to take on a new
listing.
• If properly handled, the business might sell.
On the other hand the broker runs the following
risk:
• Without good financials, the broker could be
spending a lot of time and money marketing a
business that has a low probability of selling.
• Determining and supporting a reasonable
purchase price for the business is time
consuming and difficult to justify.
• In the event the business does sell, and the
Buyer discovers the information provided was
not correct will often lead to the filing of a
lawsuit which will likely include the broker.
• Buyers will not be able to obtain bank
financing, so the business owner will need to
provide seller financing.
There are several reasons that many small
business owners do not have good financials.
They include the following:
• They have not completed one or more of the
tax returns due to oversight or objections to
paying income taxes.
• They have tax returns, but they do not include
all the gross revenue because the business
owner did not report some portion of the
cash sales. This is a major problem with
cash- oriented businesses such as car washes,
laundrymats, and restaurants.
• Many owners do not have monthly P & L
statements due to the cost of preparing them
and/or not fully understanding the need for
them.
SUMMER 2026
Some business brokers may decide to not take on
the listing and will advise the business owner of
the documents that they require prior to taking
on a listing.
The value of any business is either the value of
the tangible assets being included in the sale or a
multiple of the discretionary earnings whichever
is greater. In the event the business has a good
location, good equipment, and salable inventory,
an asset sale may be applicable which does not
reflect any value for intangible assets such as
goodwill. Approximately 25% of the businesses
we sell are considered to be asset sales wherein
the price being paid is equal to the value of the
tangible assets. For example, many restaurants
are sold as an asset sale because the new owner
can buy the business assets and take over a
favorable property lease and then change the
name and menu concept for their new business.
In most cases it is much cheaper to buy an
existing business that has a good location and
equipment than it is to start from scratch and be
required to pay for leasehold improvements and
premium rent.
In the event the business owner wants a price
greater than the tangible assets and the business
broker is willing to take on the listing, the
first step will be to determine if there are any
documents that can provide evidence of gross
income and expenses such as bank statements,
computer records, and/or customer invoices.
There are internet programs such as BIZMINER.
COM and VerticalIQ.com that can provide
industry information and standards for operating
expenses. The business broker in conjunction
with the business owner can develop a pro forma
income statement which the owner must sign
reflecting the owner’s best estimates as to the
annual gross revenue and operating expenses.
Then an estimate of discretionary earnings can
be determined and thereby provide support for a
reasonable asking price which will include all the
tangible and intangible assets.
Due to the lack of good financials, prospective
buyers will be unable to get a bank loan, so the
owner must be willing to offer Seller Financing
which is another form of security for the buyer.
The key to successful seller financing is to get a
significant down payment, usually 30% to 40% of
the purchase price with the term being 3 to 5 years
and include interest at no more than 6%. Seller
Financing can be beneficial to the business owners
due to:
• Getting a somewhat higher price for the
business
• The tax benefit of only having to report the sale
proceeds as they are received over the 3-to-5
year loan period.
• They earn 6% on the loan which is additional
income for the business owner.
• It provides confidence for the Buyer in that the
seller is willing to carry the note knowing the
cash flow of the business must be sufficient to
pay the note payments.
The following factors are required to take on a
listing without good financials:
13
1. The business owner must be able to provide
supporting documents such as bank
statements,
computer records, and/or customer invoices.
2. The Seller must be willing to help prepare an
annual pro forma income statement and sign it
which
will be given to buyer prospects.
3. The asking price must fall within a reasonable
range based on the projected discretionary
earnings.
4. The sale can be structured as an asset sale
rather than the sale of a corporation so that the
buyer is
not acquiring any potential litigation imposed
on the Seller.
5. The Seller must be willing to provide seller
financing which will greatly expand the
number of buyer
prospects who could not otherwise obtain
bank financing.
6. The Seller must be willing to sign a one-year
listing agreement and understand that it will
likely
takeover 8 months to find a buyer willing
to accept the Seller’s representations of the
business
and agree to the terms and conditions of a sale
and knowing that there is the possibility that
business will never sell.
7. Both Buyer and Seller must be willing to sign
the following Broker Disclaimer at closing.
BROKER DISCLAIMER
We, the Buyer and Seller, being the parties to
the sale of and closing of that business known
as “Name of the Business” located at “Address”,
have not requested or received any legal and/
or financial advice or services from Advanced
Business Brokers, Inc., its principals, associates
and agents with regard to the subject matter of
the sale, including, but not limited to the financial
condition of the Business or the legal ef-fect
of any of the documents involved in such sale.
We have not relied on the representations of
said broker, its principals, associates and agents
regarding any material fact in connection with the
subject matter of the sale, the business involved,
its value, compliance with any applicable law, or
the financial condition thereof or of either party
hereto and acknowledge that each party has
conducted an independent investigation of the
material facts relied upon in this transaction.
Buyer and Seller further acknowledge that
Advanced Business Brokers, Inc., its principals,
as-sociates and agents make no representations
There are several reasons that many small
business owners do not have good financials.
SUMMER 2026
or warranties as to the accuracy, authenticity
or legal effect of any statements, reports or
other documents furnished the parties to this
transaction and is not responsible for any loss
which may arise from this transaction. Buyer
further acknowledges that he is relying upon his
own judgment and decision in making this offer
and in entering and consummating the purchase
of this business.
Any or all items decided by the parties to be
handled or conducted outside of escrow or after
closing shall be settled by and between, and
become the sole and express responsibility of,
the Buyer and the Seller. Buyer and Seller agree
to hold harmless and/or indemnify Advanced
Business Brokers, Inc., its principals, asso-ciates
and agents from any and all liability whatsoever
with respect to any such “outside of escrow” items.
IN WITNESS WHEREOF, the parties have
executed this Agreement the ___ day of ______,
2026, to be effective as of ___day of ______, 2026
(the “Effective Date”).
In the event the Seller is not willing to agree
to all 7 of the above requirements, the decision
is easy. Don’t take listings that do not have
good financials or meet your minimum listing
requirements.
JEFFREY D. JONES | ASA, CBA, CBI
jdj@advancedbb.com
15
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SUMMER 2026
Former IBBA Chairman Fred
Zirkle’s New Book Reveals How
To Create a Purposeful Life
17
Former IBBA chairman Fred Zirkle’s new book has
been winning five-star reviews on Amazon.
In the book, “Creating a Purposeful Life:
Awakening to Freedom Through Values, Emotional
Mastery, and Spiritual Clarity” Fred challenges the
conventional definition of success. His message is
clear: achievement alone is not enough.
“After building and selling businesses valued in
the billions across thirteen countries,” he says, “I
learned a hard truth many high achievers discover
too late: achievement without purpose leads to
emptiness.”
Chairman of IBBA in 2000 and a recipient of the
Fellow of IBBA award, Fred remains chairman of
IndustryPro, a global investment banking firm
he founded. A high school All-American, Duke
University football captain, and NFL draft pick
of the New York Jets, he chose not to pursue
professional football. Instead, he devoted his life to
business leadership and personal development—an
arc shaped as much by failure and self-reckoning as
by success.
“Creating a Purposeful Life” is available on
Amazon in eBook, paperback and hardcover
formats.
More information
Buy the Book off Amazon Now
SUMMER 2026
Navigating the Minefield: Critical Pitfalls
in Restaurant Franchise M&A
SAM GRIFFIN
CBI
19
Restaurant franchise transactions represent a
distinct segment of the lower middle market. While
they benefit from established brands, standardized
systems, and consistent consumer demand, they
introduce structural complexities not typically
present in independent business sales.
Franchisor oversight, lease dependencies, and
nuanced financial reporting create multiple
points of friction that can disrupt otherwise
viable transactions. For intermediaries, success
depends not only on sourcing opportunities, but on
identifying and addressing these risks early.
Outlined below are several of the most common
pitfalls in restaurant franchise M&A, along with
practical considerations for navigating them
effectively.
1. Underestimating the Role of Franchisor
Approval
Franchise transfers differ fundamentally from
traditional business sales because the franchisor
retains “approval authority”. Buyers must meet
financial, operational, and experiential criteria,
and many systems include transfer fees, training
requirements, and rights of first refusal.
Franchisor approval should not be treated as a
closing-stage formality. It is a gating issue that can
determine whether a transaction proceeds at all.
Intermediaries should engage the franchisor early
and pre-screen buyers against brand standards
before advancing a deal. A financially capable buyer
who does not meet franchisor criteria is not a viable
purchaser.
2. Failing to Identify Required Capital
Expenditures
Capital expenditure requirements are a frequent
source of valuation disconnect. Many franchise
systems impose remodel or refresh obligations
triggered by transfer, lease renewal, or system-wide
initiatives. These costs can be significant and, in
some cases, immediate.
A buyer may inherit substantial capital obligations
at closing, which directly impacts underwriting and
purchase price.
Intermediaries should review the Franchise
Disclosure Document (FDD), particularly Items 8
and 11, and confirm requirements directly with the
franchisor. In multi-unit transactions, aggregated
CapEx obligations can materially affect deal
economics and should be addressed early.
3. Insufficient Normalization of Financial
Performance
Financial statements in franchise restaurant
operations often require normalization to reflect
true economic performance. Common adjustments
include:
- Owner compensation and discretionary expenses
- Related-party lease arrangements
- Deferred maintenance and capital expenditure
requirements
- Non-recurring income (e.g., grants or insurance
proceeds)
SUMMER 2026
- Gift card liabilities and loyalty program
obligations
Failure to normalize these items prior to market
frequently leads to challenges during due diligence
and increases the likelihood of purchase price
adjustments. A well-supported earnings profile, and
where appropriate a quality-of-earnings analysis,
improves credibility and reduces friction with
experienced buyers.
4. Overlooking Lease Assignment and Landlord
Constraints
In asset-based franchise transactions, lease
assignments are a critical component. Landlord
consent is typically required, and approval
timelines and conditions can vary. Landlords
may use the assignment process to renegotiate
terms, including rent increases, revised guarantee
structures, or lease modifications. In multi-unit
portfolios, a single unresolved lease issue can delay
or derail the entire transaction.
Early review of lease agreements — including
assignment provisions, expiration schedules, and
co-tenancy clauses — allows intermediaries to
identify risks and manage expectations proactively.
5. Misinterpreting Value in Multi-Unit Portfolios
While single-unit valuations are largely driven
by cash flow, multi-unit portfolios require a
broader assessment. Buyers evaluate operational
infrastructure, including management depth,
reporting systems, and the level of owner
involvement.
Businesses with established management teams
and scalable systems may command a premium.
Conversely, owner-dependent operations often
face valuation pressure during diligence. Properly
positioning the business — whether as a cash-
flowing asset or a scalable platform, is essential to
aligning pricing expectations with market reality.
Closing Thoughts
Restaurant franchise M&A requires a disciplined
and proactive approach. Transactions that close
efficiently are typically characterized by early
franchisor engagement, thorough financial
normalization, and comprehensive lease analysis.
Restaurant franchise M&A requires a disciplined and proactive
approach. Transactions that close efficiently are typically
characterized by early franchisor engagement, thorough
financial normalization, and comprehensive lease analysis.