If you have a financing or lease agreement for one of your company`s devices, you must either pay the loan or arrange for the transfer of the contract to the buyer before reshout. If you rent land, you must obtain the agreement of the lessor either to assign your lease or to grant a new lease to the buyer. Just like the franchise agreement, your lease has a particular process to follow. This usually involves the buyer`s permission as a tenant by the landlord and the assumption of the landlord`s costs. Those considerations should be taken into account at the early stages of the agreement, in order to avoid effects such as obligations considered transferable not being in this way. Failure to notify the franchisee or without their consent is ill-advised. Depending on the proper implementation of the assignment clause, a franchisee may have an action for damages or have the assignment invalidated by a court. Many franchise agreements give the franchisor the right of pre-emption. This means that you must give the franchisee the opportunity to buy the business under the same conditions as those offered to your buyer.
If the franchisor does not accept the offer, you will only be able to continue your sale at that time. Century 21 SP has obtained from Century 21 the rights to create franchises in Australia. Century 21 SP experienced financial difficulties after signing a number of franchisees. An assignment entails the immediate transfer of an existing ownership right from the assigning party to another party. The franchisor usually requires the buyer to sign a new franchise agreement for the balance of the term of the seller`s franchise agreement. This is usually the franchisee`s current franchise agreement on different terms from your agreement. Keep in mind that the 7-day cooling-off period provided for in the Code does not apply to the transfer of an existing business. Despite the language of “assignment” used in the act, the Court considered whether the 2003 contract had been assigned or novice. A franchise is an investment. As long as you have a franchise agreement, you have the right to sell your business and the franchisee cannot unduly refuse consent to the sale.. . .