Buying a franchise: who could take over from your franchisor?

When buying a franchise, you assess the brand, the people and the promised support. Yet the company you sign with may not remain your partner throughout the agreement. The contract may allow it to transfer the relationship to another company, potentially with consent you give when you sign. Before joining a franchise network, check who can take over the franchisor’s obligations and what such a change would mean for your outlet.

1. Distinguish a change of ownership from a transfer of the agreement

The phrase ‘sale of a franchise’ can describe different events. What matters for your rights is what changes legally, not how the franchisor describes the deal.

A change in the company’s ownership does not generally mean you have a new contractual partner. If someone buys shares in the franchisor, the same company usually remains bound by your agreement. However, its management, working practices and business priorities may change. Check whether the agreement specifically addresses a change of control of the company.

A transfer of the agreement to another company means replacing a party to the contract. You need to know who is taking over the rights and obligations, and on what terms. A clause allowing transfer to any affiliated company is not merely an administrative detail: that company may have different staff, resources and experience.

A third possibility is that the franchisor outsources certain tasks while remaining your contractual partner. Outsourcing training or technical support is not, in itself, the same as transferring the entire agreement. Ask who remains responsible for delivery and whom you should contact if something goes wrong.

2. Check consent requirements and the Slovenian legal framework

Slovenia has no dedicated franchise law, compulsory franchise register or specifically prescribed pre-contractual disclosure document. A franchise agreement is an innominate contract — one not defined as a separate contract type by statute — governed primarily by the general rules of the Slovenian Obligations Code (OZ). Depending on the relationship, other rules also apply, such as competition law. The Companies Act (ZGD-1) is relevant to corporate reorganisations.

Under the general rule in the OZ, transferring a bilateral contract to a third party requires the other contracting party’s consent. That consent can be given in advance. Check, therefore, whether signing means you are already approving future transfers, rather than retaining the right to decide on each one later. Mergers and other corporate reorganisations require a separate assessment of the rules on legal succession.

Look for clauses covering transfers of the agreement, legal successors, affiliated companies and changes of control. Ask a lawyer to explain their combined effect. Wording such as ‘the franchisor may freely transfer all rights and obligations’ could significantly limit your say in the choice of a new partner.

If the agreement is governed by foreign law, do not assume that Slovenian consent rules will automatically resolve the issue. The chosen law must be reviewed, along with any mandatory rules that apply regardless of the contractual choice.

3. Agree terms that protect business continuity

A transfer is not necessarily bad: a new partner may bring better organisation and additional resources. The problem is a transfer without clear criteria or responsibility for the handover. Before signing, propose specific safeguards suited to your business model:

• Advance written notice: specify when you must be told about a planned transfer and what information the notice must contain.
• Identity of the incoming company: request details of the company, its experience and its ability to fulfil its contractual duties.
• Preservation of obligations: a transfer should not automatically justify higher fees, reduced support or a shorter agreement term.
• Outstanding obligations: clearly allocate responsibility for services already paid for but not yet delivered, outstanding complaints and other unresolved matters.
• Transition plan: identify the people responsible and ensure continued access to ordering systems, software, training and operational support.

These safeguards are not automatic statutory rights; they need to be properly agreed. Any continuing liability of the original franchisor, or a guarantee from another company, also requires specific legal provisions.

Avoid simply requiring the successor to be ‘suitable’. Verifiable criteria are more useful: the ability to provide the agreed support, appropriate rights to use the brand and the assumption of specifically listed contractual obligations.

4. Test a practical scenario before signing

Ask the franchisor a simple question: ‘If you transfer the agreement to another company next year, what changes for me and what stays the same?’ Compare the answer with the contract wording, not just the sales presentation.

Then consider a case where you have already paid for training but it has not been delivered by the time of the transfer. Who must provide it? To whom do you send your claim? What happens if the new partner does not have the trainers needed? This quickly exposes uncertainties that a general promise of a seamless transition cannot resolve.

Also agree how you will verify the authenticity of any notice naming a new recipient for your payments. Do not accept a change of bank details solely on the basis of an unexpected email.

Practical takeaway: before signing, establish whether you are consenting in advance to a transfer of the agreement. Set out the requirements for the new partner, responsibility for outstanding obligations and arrangements for maintaining business continuity.