Assignment Clause

An assignment clause is a section of the franchise agreement that specifies the terms under which a franchisee can sell or transfer ownership of their franchise to another party. This clause protects both the franchisor and the integrity of the brand by ensuring any new owner meets the same qualifications as the original franchisee. It typically includes conditions such as obtaining franchisor approval, paying a transfer fee, and completing training. Understanding the assignment clause is essential for franchisees who plan to exit or sell their business, as it directly affects resale value and transferability of the franchise rights.