What can I do if my franchisor takes months to respond to a transfer?

A franchisor that does not answer a transfer request leaves you holding a deal you cannot close. The steps below move from the paper you already have to the legal duties that may apply. None of them should wait for the delay to become months.

Start with what the agreement says

Look for a response period in the transfer clause, and for any wording on what happens if the franchisor does not reply. Your agreement may be silent on both. If yours names a period, check what event starts it, such as receipt of a complete request, which is why the record of what you sent and when matters.

Build the paper trail

• Send the full package the clause requires, by a method that records delivery.
• Ask in writing for a list of anything the franchisor says is missing.
• Follow up on a calendar, and keep every reply.
• Keep your buyer informed in writing, and ask the buyer whether the closing date can move.

The duty of fair dealing

Ontario’s Arthur Wishart Act (s.3) and Manitoba’s Franchises Act (s.3) each say every franchise agreement imposes a duty of fair dealing in its performance and enforcement, and that a party who breaches it faces a right of action for damages. Both define the duty to include good faith and reasonable commercial standards. Manitoba’s Act (s.3(3)) and British Columbia’s Act (s.3(1)) also apply the duty in the exercise of a right under the agreement. Whether a particular delay breaches the duty depends on the facts, so have a lawyer assess it.

Approval on reasonable grounds

Ontario’s Act (s.5(8)) and British Columbia’s Act (s.5(9)) say a grant by a franchisee is not effected by or through the franchisor merely because the franchisor has a right, exercisable on reasonable grounds, to approve or disapprove the grant. That wording is part of the disclosure exemption for resales; it sets no deadline and no duty to give reasons. Ask a lawyer whether a letter asking for a decision, and the reasons for any refusal, suits your file.