Legal Question in Business Law in Texas

Transfer of interest clause

Can someone tell me exactly what the following means, or why this option might be exercised. It is from a franchise contract, in the transferability of interest section.

''Franchisee shall, at franchisors option and request,execute a written guarantee of the transferee's obligations under the agreement, which guarantee shall not exceed a period of three (3)years from the date of transfer.''

Thanks...


Asked on 1/20/07, 9:06 am

1 Answer from Attorneys
Cheryl Mullin Cheryl Mullin & Associates, PC

Re: Transfer of interest clause

The purpose is (a) to provide the franchisor additional security that the transferee will meet its franchise obligations, and (b) encourage a selling franchisee to be selective when choosing a buyer.

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Answered on 1/20/07, 12:56 pm


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