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
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Other messages
The AD of September 14, 2016, mr. Alex Dolphijn of Ludwig & Van Dam about wanting to share with franchisees in the online revenue of franchisor web shops.
The AD of September 14, 2016, mr. Alex Dolphijn of Ludwig & Van Dam about wanting to share with franchisees in the online revenue of franchisor web shops.
Interview Mr. Alex W. Dolphijn at BNR Nieuwsradio about the further escalation of Bruna’s long-running conflict with its franchisees
Interview Mr. Alex W. Dolphijn at BNR Nieuwsradio about the further escalation of Bruna's long-running conflict with its franchisees
Front page of Het Financieele Dagblad and on page 3 dated 8 September 2016; mr. Alex Dolphijn of Ludwig & Van Dam about the further escalation of Bruna’s long-running conflict with its franchisees.
Front page of Het Financieele Dagblad and on page 3 dated 8 September 2016; mr. Alex Dolphijn of Ludwig & Van Dam about the further escalation of Bruna's long-running conflict with its franchisee
Stone in the pond on forecasting issues – September 6, 2016 – mr. DL van Dam
Stone in the pond in forecasting issues
Stone in the pond in forecasting issues
As of July 1, 2016, an important amendment to the law came into force.
Supermarket letter – 15
Radical turnaround in forecasting problems.