| W Michael Garner
| May 10 | legal
What happens to a franchise if a franchisee passes away? Can the franchise be transferred to a qualified successor? Or will the business automatically be terminated? Frequently, franchise agreements answer these questions. Most agreements allow the franchisee's heirs to operate for a given period of time—say four months—and then the franchise must be sold to a qualified buyer, who may be one of the heirs. But many agreements do not permit this flexibility, in which case it's important to look to whether state statutes address the question. A number of states have covered this issue.
Franchise succession in California
After the death of a franchisee in California, a surviving spouse, heir, estate, or majority shareholder may own the franchise for a reasonable period of...