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Home Learn Franchising The Ultimate Guide to Franchising Your Business What Happens if a Franchisee Dies?

When a franchisee dies, the fate of the franchise will depend on the laws of the state where the franchise is located. This is because when it comes to the death of a franchisee, each state has different regulations regarding the transfer of a franchise. To know the regulations in the state of New York, you can get the advice of an experienced New York franchise lawyer.

For instance, when a franchisee dies in California, the surviving spouse, heirs, and estate of the deceased franchisee must be given the opportunity to participate in the ownership of the franchise for a reasonable time after the death.

When a franchisee dies in Arkansas, Nebraska or New Jersey, the franchisor may not restrict the sale, transfer, or issuance of any securities of the franchisee or prevent the sale, transfer, or issuance of shares of stock or debentures to heirs of the principal owner of the franchise. This is true as long as the basic financial requirements of the franchisor are complied with, and any such sale, transfer, or issuance does not result in a sale of the franchise.

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