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Does The Transfer Of An Existing Franchise Trigger A Franchisor's FDD Disclosure Obligations?

No. Under the Federal franchise Rule a franchisee's transfer of an existing franchise agreement does not constitute a franchise sale and therefore does not trigger a franchisors FDD disclosure obligation provided that the franchisor has not had significant involvement with the prospective transferee.

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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