The right of the franchisor to sell its franchise organization to a
Many franchise agreements include a provision stating that the franchisor reserves the right to transfer its franchise organization to a third party.
The question that then arises for many franchisees is whether this is possible without further ado. After all, they had emphatically concluded a franchise agreement with the relevant franchisor because of, among other things, the knowledge that the relevant franchisor has of the industry and the know-how present in the franchise organization. Although the latter is of course very understandable, a franchisor is allowed to include such a provision in the franchise agreement and then to implement it. It therefore regularly happens in practice that a franchisor wants to dispose of the entire organization – for very different reasons.
However, it is not the case that the franchisor is free to sell his business to any party. In the case of a sale of a franchise organization, the interests of the franchisees must prevail, which means that in the event of a transfer of the organization it must be ensured that the franchisees can continue their business in the same or in a very similar manner. on the terms agreed with the transferring franchisor. This applies in particular, of course, to the financial conditions on which the cooperation between the franchisor on the one hand and franchisees on the other is based. It cannot be the case that a transfer to a successive franchisor will result in the franchisees suffering a serious financial loss. The franchisee may in any case assume that during the term of the agreement, as he has concluded with the transferring franchisor, he can continue his business under the same conditions, irrespective of whether the franchise organization is transferred.
This is all the more pressing if the franchisee has made significant investments or has entered into financing obligations with lenders when entering into the franchise agreement – as will be the case with most franchisees. It goes without saying that entering into such obligations is closely related to the conditions under which the franchise agreement has been entered into. The successive franchisor must also ensure that the market position of the company it takes over does not deteriorate. This is, of course, partly dependent on the question of whether a successive franchisor takes over the organization with the associated name and the like or whether it is placed under an existing franchise organization. This will be discussed in more detail in one of the following articles.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Termination of lease agreement after purchase of retail space
At the end of 2010, the Supreme Court ruled on the waiting period that applies to termination due to urgent personal use.
Forecast: developments franchisees
The court in Arnhem has recently again ruled on so-called 'prognosis problems'.
Webshops by the franchisor: like it or not?
Today, more and more franchisors are realizing that, in addition to the distribution channel that the franchisees form
Failing to cooperate in checking hygiene requirements of the franchisee
The court in Amsterdam recently ruled in a case where a franchisee did not meet all hygiene requirements.
‘If the employee starts franchising…’. The employer’s duty of care as a franchisor
It will not be easy to assume that a 'normal' employee has given up his employment contract. However, what...
Sale of rental rights supermarket location not allowed
Recently, the Court of Appeal in The Hague has ruled that supermarket organizations have to switch locations for the penny.