In the 1980s, the franchise business model experienced something of a market bubble. But now, franchisees that started their businesses during the bubble are beginning to retire, or in some cases, pass away. What happens when a franchisee retires or dies depends on your state law and your unique franchise agreement. Some states require franchisors to give surviving spouses and heirs a sort of “trial run” for a reasonable period of time after the franchisee’s death. Other states disallow any restriction on the right to succession in the franchise agreement. Illinois law is silent on the issue of succession, making it paramount that you consult with a franchise lawyer to review and negotiate your franchise agreement.
Most franchise agreements contain provisions that give the franchisor the right to veto a potential successor’s ownership of the franchise. If you want your family to retain your franchise after your retire or pass away, it is important you plan ahead. A skillful franchise lawyer can combine franchise agreement negotiation and estate planning tools to optimally position your franchise for succession.
If you have questions about what will happen to your franchise after you retire or pass away, contact Marcus & Boxerman at info@marcusboxerman.com or (312) 216-2720 to get answers.