upgrade

Not quite sure which version of Parallels do you have, but the virtual machine itself would stay intact.

In fact, you can easily back it up, the virtual machine should be located in /Users/<username>/Documents/Parallels/
You are looking either for .pvm or for .hdd file, depending on Parallels version.
Just copy this file to, for example, an external hard disk and that would serve as a perfect backup.
 
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