Transfer of the franchisor
Most franchise agreements include a comprehensive transfer arrangement for the benefit of the franchisee, detailing how the franchisee may transfer its business to a third party if it so desires. However, the franchisor can also transfer his company, although franchise agreements often contain little or nothing about this. A provision that sometimes recurs is that the franchisor is free to transfer his business to a third party, provided that this does not affect or encumber the rights of the franchisees in any way. That is of course also correct and summarizes the point in a nutshell: ideally, a franchisee will not notice a takeover or sale of the franchisor’s business.
However, this does imply that both the selling party and the acquiring party must realize that the rights of the franchisees cannot actually be challenged. Incidentally, this is a principle that arises from contract law itself and therefore also applies if the franchise agreement does not expressly contain a provision to that effect. In practice, it sometimes happens that franchise organizations are transferred to third parties while there are conflicts within that organization between the franchisor and one or more franchisees. Perhaps unnecessarily, it should be noted in that context that the transfer of the franchise organization does not imply the end of that conflict. It is then one of the two: either the acquiring party will in so many words, made known to the franchisee(s) involved, also “take over the conflict”, or the selling party will declare in so many words that it is responsible for the further settlement of the that conflict, in both cases including the settlement of any compensation obligations and the like. In this context, it is good franchising practice to inform all franchisees, including those involved in the conflict, of the intended transfer and its consequences in a timely manner, in the broadest sense of the word, so that both the business operations in a broad sense the franchisees, as well as the handling and further settlement of the conflict as a result of the acquisition.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Use of telephone and fax numbers after the
Most franchise agreements stipulate that after termination of the franchise agreement, the former franchisee must comply with a non-competition clause.
Recent developments regarding resale price maintenance
On February 13, 2004, the administrative judge of the District Court of Rotterdam rendered a judgment between Secon Group BV
Reinvestment / restyling within an existing franchise concept.
In practice, we have recently seen more and more developments that point to a conversion/restyling of the franchise organization
Agency: some outlines
In practice, questions are asked with some regularity regarding the legal nature
Rental price change
Following on from earlier published articles of my hand, I will once again deal with a tenancy law issue below.
Franchise Fees
An extremely important subject for both the franchisee and the franchisor that is invariably included in the franchise agreement concerns the franchise fees, often referred to as the term