Selling, Assigning or Transferring Ownership of an Existing Franchise in NJ
Selling an existing franchise involves several additional steps your lawyer must address. The first step is selling your franchise and notifying your franchisor in writing.
The notice you give to your franchisor must generally include (1) the transferee’s name, address, financial qualifications and (2) business experience during the previous five (5) years. But remember, the franchise agreement you originally signed will dictate the precise terms of notice you must give.
The failure to notify the franchisor before a transfer, assignment or sale permits a franchisor to claim a breach of the franchise agreement and to terminate the franchise with damages.
After you have given notice, the franchisor generally has sixty (60) days to evaluate your request and send a written response either approving the transfer or setting forth the reasons for denying the transfer. If the franchisor does not respond to the notice within sixty (60) days, the law deems the transfer approved by the franchisor, unless the franchise documents read the opposite.
Again, in NJ a commercially good faith standard exists in the conduct and relations between a franchisor and franchisee and the franchisor must act in good faith in their treatment of their franchisee.
TESTIMONIAL
In my negotiations with a large international corporation, Fredrick P. Niemann worked with me to the end. They were thoughtful and proactive in identifying the issues of concern to me, issues I hadn’t even thought of. I was very satisfied with the services they rendered.
Cheryl Scheidler, Wall Township
Fredrick P. Niemann Esq.
For more information on buying or selling your NJ franchise, please visit our page on Franchise Law, or you may call Mr. Niemann toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com to schedule a convenient consultation about your NJ franchise matter.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Selling a Business Attorney