20Transfer or novation of franchise

20 Transfer or novation of franchise

(1) A request for a franchisor’s consent to transfer or novation of a franchise must be made in writing.

(2) A franchisor must not unreasonably withhold consent to the transfer or novation .

(3) For subclause (2), circumstances in which it is reasonable for a franchisor to withhold consent include:

(a) the proposed transferee is unlikely to be able to meet the financial obligations that the proposed transferee would have under the franchise agreement; or

(b) the proposed transferee does not meet a reasonable requirement of the franchise agreement for the transfer or novation of a franchise; or

(c) the proposed transferee has not met the selection criteria of the franchisor; or

(d) agreement to the transfer or novation will have a significantly adverse effect on the franchise system; or

(f) the proposed transferee does not agree in writing to comply with the obligations of the franchisee under the franchise agreement; or

(g) the franchisee has not paid or made reasonable provision to pay an amount owing to the franchisor; or

(h) the franchisee has breached the franchise agreement and has not remedied the breach.

(4) The franchisor is taken to have given consent to the transfer or novation if the franchisor does not, within 42 days after the request was made, give to the franchisee written notice:

(a) that consent is withheld; and

(b) setting out why consent is withheld.

(5) In this clause:

transferee means a franchisee who seeks to acquire a franchise business through either transfer or novation of the franchised business.