Transfer Of A Franchise Agreement

The code does not automatically give a franchisee the right to transfer their franchise agreement to a third party. The code provides a process that allows a franchisee to obtain your consent to a transfer. You should address the issue with your franchisee board and get their help and support in determining the right cash flow and debt service ratio. It is likely that existing franchisees are in the best position to determine what a good report or formula should be for the system. At Goldstein, we have decades of experience representing franchisees in franchise transfers. We can help you resolve transfer restrictions in your agreement; and if necessary, we can represent you in negotiations with your franchisor in order to follow a successful sale. “Some franchise agreements state that if you haven`t made any other plans after your death, the franchisor has the option to terminate the franchise agreement and your estate has 180 days to sell it,” Einbinder said. Under the FTC rule, “A person who purchases an existing franchise directly from the franchisee to which it belongs, without significant contact with the franchisee, is not a potential franchisee. A buyer who buys from an existing franchisee is not considered a potential franchisee, therefore only because the franchisee has the right to authorize or deny the buyer, unless the franchisee`s role in the transaction is otherwise important. “[1] You may not refuse to inappropriately accept the transfer of a franchise agreement. .

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