Franchisors, Invoke Your Bankruptcy Rights Or Lose Them

Law360, New York (November 22, 2013, 5:23 PM EST) -- When a franchisee files for bankruptcy, a franchisor naturally has concerns over how the process will affect the parties’ relationship. Of particular concern is the possibility that the franchisor will be forced into a relationship with an unacceptable successor as a result of a bankruptcy judge’s decision to authorize assumption and assignment of the franchise agreement over the franchisor’s objection.

The decision to assume and assign a contract belongs in the first instance to the bankruptcy trustee or the debtor in possession in a Chapter 11...
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