We can also assist in the purchase/sale of an existing franchise or distribution business. Franchise and distribution agreements generally require the franchisor’s or distributor’s approval for the sale of an existing business. The Franchise and distribution agreements in most cases will impose a transfer fee to be paid to the Franchisor. A franchise lawyer can help in buying or selling a franchise and close the deal easily.
Many times the Agreement will call for the buyer to sign a new agreement with new terms. In addition, after the sale the seller may be burdened with restrictions on its business activity post sale. Anticipating and planning for these restrictions, and prepare yourself to minimize their impact, negotiate or fight them, is crucial to achieving a successful sale.
Some Franchise Agreements include the “right of first refusal.” This gives the franchisor the right to match a third party’s offer to purchase the franchisee’s business. Franchisees often challenge the franchisor’s refusal to holdback consent to a sale or transfer sought by the franchisee. However, the Courts often side with the Franchisor in the Franchisor’s right to grant or refuse its consent.
Things to Work on When Selling your existing franchise
If you have decided to exit the a franchise, you should take care of few things before proceeding. First, you should discuss your plan with the franchisor. You are not he only one who is going to exit a franchise. A clear communication with the franchisor can help in closing the deal easily. Second, you should gather all the documents and papers. These documents will help you close the deal with the buyer.
We have helped many clients in buying or selling a franchise. If you planning to buy or sell a franchise, then feel free to talk to our attorneys. Our network of attorneys can help you close the deal and solve your queries related to franchise law. Talk to our attorneys now!