Starting a Business

Is my franchise agreement void if the entire company went bankrupt?

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Whether your franchise agreement can be voided depends on what it says. First, you will want to look for language that indicates whether or not the franchise agreement (or certain provisions) "survive the termination of the agreement."

Despite the franchise going bankrupt, the terms of the franchise agreement may make you personally liable for certain payments--and if you have not filed for bankruptcy protection, you could still be on the hook.

In addition, you'll want to look for language that allows the agreement to be "assigned" to another party, and what happens if that event occurs. Selling the company to another brand may or may not count.

To get a clear read on whether the agreement is still in force, you'll want to show it to an attorney who focuses on franchise matters.

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