11Assignment of rights etc. of franchisee

#### 11 Assignment of rights etc. of franchisee (1) In this section: > assignment does not include an equitable assignment. > interest includes rights and benefits. > obligations includes liabilities and burdens. (1A) In this section, person with prescribed experience, in relation to a particular time, means a person who, for a period amounting, or for periods amounting in the aggregate, to one year or more during the period of 6 years preceding that time, was a franchisee in relation to a franchise agreement or franchise agreements, where the agreement, or each of the agreements, as the case may be, was not terminated by reason of a ground referred to in any of paragraphs 16(2)(a) to (j) (inclusive) or by reason of any other breach of the agreement by the person. (2) A corporation is not entitled, directly or indirectly, to enforce, or to rely as a defence on, any provision of a franchise agreement or of a related agreement (not being a provision to which subsection (3) applies) that would, but for this subsection, have the effect of: (a) prohibiting the franchisee in relation to the first‑mentioned agreement from assigning the whole or part of his interest under the first‑mentioned agreement; (b) limiting or restricting, or imposing conditions on, his power to make such an assignment; or (c) requiring him, before making such an assignment, to offer to surrender the whole or part of that interest to the franchisor. (3) Where a provision of a franchise agreement has the effect of prohibiting the franchisee from assigning the whole or part of his interest under the agreement without the consent of the franchisor, the franchisor shall not unreasonably withhold its consent and, where its consent is unreasonably withheld, it shall be deemed to have granted its consent. (4) Where a franchisor withholds consent to an assignment of the whole or part of the interest of the franchisee under a franchise agreement (being an agreement containing a provision referred to in subsection (3)) and the proposed assignee is a person who is none of the following: (a) a person with prescribed experience; (b) a member of the franchisee’s immediate family; (c) a company controlled by the franchisee; then, for the purposes of subsection (3), the consent of the franchisor shall be deemed to be reasonably withheld. (5) Where a franchisee proposes to make an assignment of the whole of his interest under a franchise agreement (being an agreement containing a provision referred to in subsection (3)) to a person who is neither a member of the franchisee’s immediate family nor a company controlled by the franchisee, (in this subsection and subsection (5A) referred to as the proposed assignment), he shall serve on the franchisor a notice in writing setting out particulars of the proposed assignment and offering to do whichever of the following acts is required by the franchisor to be done, namely: (a) to terminate the franchise agreement for an amount of consideration equal to the consideration for the proposed assignment; or (b) to assign the whole of that interest to such person as the franchisor may nominate, on terms not less favourable to the person nominated than the terms of the proposed assignment. (5A) Within 30 days after the service on a franchisor of a notice under subsection (5), the franchisor shall serve on the franchisee a notice in writing: (a) granting or withholding consent to the proposed assignment; (b) rejecting the offers made in the first‑mentioned notice; (c) accepting the offer to terminate the franchise agreement; or (d) nominating a person to whom the franchisee may assign his interest in the agreement; and if, at the expiration of that period of 30 days, the franchisor has not served such a notice, the franchisor shall be taken to grant consent to the proposed assignment. (6) Where, without the consent of the franchisor, a franchisee in relation to a franchise agreement (being an agreement containing a provision referred to in subsection (3)): (a) makes an assignment of the whole of his interest under the agreement without first having served on the franchisor a notice under subsection (5); or (b) after having served on the franchisor such a notice, makes an assignment of the whole of his interest under the agreement to a person other than a person nominated by the franchisor in accordance with subsection (5A); then, for the purposes of subsection (3), the consent of the franchisor shall be deemed to have been reasonably withheld. (7) For the purposes of subsection (3), where a franchisor requires payment or other consideration for its consent to an assignment (other than payment of reasonable administrative and legal costs incurred in the giving of consent), the consent shall be deemed to be unreasonably withheld. (8) Nothing in this section shall be taken to limit the grounds upon which consent to an assignment may be reasonably withheld. (9) When a franchisee duly assigns the whole or part of his interest under a franchise agreement (whether or not the agreement contains a provision referred to in subsection (3)), the agreement has effect, by force of this subsection, as if the franchisor, the franchisee and the assignee had agreed: (a) in the case of an assignment of the whole of that interest—to the immediate assignment to the assignee of all the obligations imposed on the franchisee by the provisions of the agreement, other than obligations transferred by the assignment of that interest; or (b) in the case of an assignment of part of that interest—to the franchisee and the assignee immediately becoming jointly and severally bound by all those obligations, other than obligations transferred by the assignment of that interest. (10) Where: (a) a franchisee duly assigns to a person (in this subsection referred to as the assignee) the whole or part of his interest under a franchise agreement that is one of 2 or more related agreements (whether or not the franchise agreement contains a provision referred to in subsection (3)); and (b) at or after the time when the assignment is made, the person who is the franchisee in relation to a related agreement (in this subsection referred to as the assignor) duly assigns the whole or part of his interest under that related agreement to the assignee; that related agreement has effect, by force of this subsection, as if the corporation that is the franchisor in relation to that related agreement, the assignor and the assignee had agreed: (c) in the case of an assignment of the whole of the interest under that related agreement—to the immediate assignment to the assignee of all the obligations imposed on the assignor by the provisions of that related agreement; or (d) in the case of an assignment of part of the interest under that related agreement—to the assignor and the assignee immediately becoming jointly and severally bound by all those obligations. (11) Where, but for this subsection, the whole or part of the interest of the franchisee under a franchise agreement would not be capable of assignment by reason of the agreement being a contract of a personal nature, the agreement has effect, by force of this subsection, as if the franchisor had agreed, at all relevant times, that that interest, or that part of that interest, as the case may be, was capable of assignment. (12) Where an assignment of obligations under a franchise agreement occurs by virtue of paragraph (9)(a) or (10)(c), then, for the purposes of sections 13, 15, 17, 17A and 17B, the franchise agreement as subsisting after the assignment shall not be taken, by reason of the assignment, to be a new agreement. (13) A reference in this section to obligations, in relation to the assignment of an interest under an agreement, does not include a reference to an obligation the time for the performance of which has arisen before the time when the assignment is made. (14) Nothing in this section shall be taken to affect the right of a franchisee: (a) to assign his interest under the franchise agreement by way of mortgage or charge; or (b) to grant, confer or sublet a lesser interest derived from his interest under the franchise agreement; or to affect the operation of a provision of the agreement of a kind referred to in subsection (2) to the extent that it relates to such an assignment or grant.