How to sell a family business to a non-relative without ending it

Varsity Pizza's ownership will change on Dec. 1, after 100 years in business. The Dellas family founded Varsity Pizza in 1926. Ted Dellas recently turned 102. The incoming owners plan to retain Varsity Pizza's recipes, employees, and traditions. For a long-lived company, the test is whether those things survive the paperwork.

The seller's leverage is strongest before the asset is priced. If the buyer can remove the name, replace the staff, or alter the recipe, the business may legally continue while the familiar service changes. The contract should make continuity enforceable. The terms should be specific enough to check later.

The transfer must protect more than assets

A non-family successor can be a good steward if the deal gives the seller a way to verify the work. The checklist below is the minimum set of terms to negotiate before signing, because each protects a different part of what customers actually buy.

• Retain the recipes: Put the core formulas, prep steps, and supplier specs in a written document the buyer must use for a defined period.
• Retain key employees: Name the people who carry the craft, set their roles, and require a transition period before changes.
• Protect the name: Define how the brand may be displayed, licensed, or altered, and reserve the right to object to dilution.
• Codify traditions: Write down the routines that customers recognize, from service standards to seasonal practices, so they are not left to memory.
• Choose a local operator: Prefer a buyer with nearby operations and a track record of running properties in the community.
• Keep the founding family close enough to enforce continuity: Create a review right, a notice period for major changes, and a clear path for the family to raise concerns.

Local stewardship is part of the sale

Customers often buy a place as much as a product. When a long-lived business changes hands, the local operator becomes the continuity standard. In the Varsity Pizza sale, Brian and Renee Bruno, who run Brian's Landing in Jamesville, will become Varsity Pizza's operators. Jaclyn Tesori and Tom McNerney will run day-to-day operations at the 802 S. Crouse Ave. location. The names matter because they make continuity accountable. A local operator is easier to monitor than a distant owner.

Syracuse University purchased four commercial properties, including Varsity Pizza and Faegan's, for $12 million in 2023. Institutional ownership can complicate stewardship when the asset is managed for portfolio reasons rather than neighborhood life. The seller should still negotiate the operating terms that keep the business recognizable.

A family that has carried a business across generations has a different view of risk than a quarterly investor. The seller's job is to translate that view into contract language.

The family must stay close enough to enforce continuity

The family's role after the sale is to verify continuity, not to run the business. That role works best when it is limited, clear, and tied to the terms in the contract.

Long-lived firms often survive because they treat employees as a durable asset. Family-run firms report annual employee turnover of 9%, compared with 11% for non-family businesses. A buyer who inherits that stability has a reason to keep the people who make the business work.

Survival follows a similar pattern. Family businesses had a 20% higher likelihood of 20-year survival than non-family firms in a Norwegian study of the 2008 financial crisis. Family businesses account for 41.9% of U.S. bankruptcy filings, with a 17.6% figure for firms with strong family ownership and management. Those numbers suggest that continuity is a business discipline.

Kent Brushes has produced hair, teeth, nail, clothes, and shaving brushes since 1777. Eric L.H. Cosby took over Kent Brushes in 1932 after the Kent family had controlled it for six generations, and the Cosby family has led the company since. Kent Brushes hand-stitches replacement bristles into wood using a method that is much the same as two and a half centuries ago. The method shows that staying power can outlast ownership changes.