I am a franchisee or exclusive distributor of a brand: do I need its permission to sell my company, and can it veto the buyer or take over the deal?

Quick answer

Capittal's view is that, in most cases, yes, you will need the brand's consent. Franchise and exclusive distribution agreements usually require approval to assign the contract and for any change of control, even if you sell shares rather than the business. Many also include a right of first refusal that lets the brand match the offer and take the deal. That is why your company's value depends heavily on the contract: what the buyer acquires is a right with an expiry date. Read it before you start and plan when and how to talk to the brand.

Why do I need the brand's permission if the company is mine?

Because what makes your company valuable is not entirely yours: it is the right to use a brand, a know-how or a territorial exclusivity granted by someone else. As a general rule, assigning a contract to a third party requires the other party's consent, and franchise and distribution agreements usually say so in writing.

Spain's specific franchise rules (article 62 of Law 7/1996 on Retail Trade and Royal Decree 201/2010) mainly govern the information the franchisor must provide before signing. They set no rules on the sale of the franchisee's business: that is left to your contract. For exclusive distribution there is no specific statute, so the contract matters even more.

Which clauses should I look for in my contract?

In our experience, these are the ones that decide whether a sale is viable and at what price:

Clause	What it allows the brand to do
Assignment subject to consent	Approve or refuse the transfer of the contract to a new holder
Change of control	Terminate the contract if the shareholders change, even if the company stays the same
Right of first refusal	Match the buyer's offer and take over the deal
Buyer approval	Require a profile: experience, financial strength, commitment, training
Transfer fee	Charge an amount for approving the change of holder
Post-term non-compete	Stop you operating in the same business for a period after you leave

If I sell the shares rather than the business, do I avoid the consent?

Almost never. A common mistake is to think that, because the company holding the contract stays the same, there is no assignment. That is exactly why contracts include change-of-control clauses: if whoever controls the company changes, the brand can object or terminate. Selling shares in breach of that clause can leave the buyer with a company that loses its main asset the next day. No serious buyer will close without it being resolved.

Can the brand veto the buyer or take over the deal?

It can veto the buyer if the contract grants that power, usually tied to profile criteria. Ideally those criteria are objective and a refusal is not arbitrary, but what the contract requires is the starting point. If there is a right of first refusal, the brand can match the terms agreed with your buyer and acquire your company or your contract itself. That is not necessarily bad for you: the brand, or another franchisee in the network, is often the natural buyer and the one that best understands the business.

On non-compete clauses, EU Regulation 2022/720 on vertical agreements only automatically covers post-term non-compete obligations that meet strict conditions, including a maximum duration of one year and being limited to the premises you operated from. If your clause goes further, have a lawyer review it.

How does the contract affect the price of my company?

A great deal. The buyer is not just buying your profit and loss account; it is buying the likelihood that those results continue. That is why these weigh heavily:

• The remaining term of the contract and whether renewal is automatic or at the brand's discretion.
• Change-of-control and buyer-approval clauses, which add uncertainty to closing.
• The track record with the brand: breaches, audits or open disputes reduce value.

If consent is still missing, the deal is signed subject to a condition precedent: the share purchase agreement does not complete until the brand approves. Meanwhile, the buyer usually protects itself with an adjusted price or a deferred portion of the payment.

If you are a distributor and the brand chooses not to renew or to terminate instead of approving the sale, a goodwill indemnity claim may come into play. Spain's Agency Contract Law 12/1992 only applies to commercial agents, and courts have applied it by analogy to distributors in specific cases, so it is an argument to weigh with caution, not an automatic right.

When and how should I talk to the brand?

Neither at the very start nor at the very end. If you tell the brand before you have anything, you create needless uncertainty in your commercial relationship. If you tell it once the buyer is fully agreed, you risk a veto or a matching right that wipes out months of work. The right moment is usually when you have a defined buyer profile or a serious offer. Before that, prepare the ground: find out what profile the brand accepts, what documents it asks for and how long it takes to decide, and consider offering the deal to the brand itself or to other franchisees as a real alternative, not just a formality.

What is the next step if I want to sell my franchise or distribution business?

Before talking to any buyer, go through the contract carefully: assignment, change of control, first refusal, approval, fees, term and non-compete. That tells you what your company is really worth and which route is viable. Within the NRRO group, the legal team can review the contract while we prepare the transaction. This article is for guidance only and does not replace legal advice on your specific case.

Capittal Transacciones is an M&A mid-market boutique advising deals from 3 to 250 million euros from eight offices across Spain (Barcelona, Madrid, Girona, Lleida, Tarragona, Palma de Mallorca, Zaragoza, and Valencia), part of the NRRO group. A partner runs your deal from start to finish, including the conversation with the brand. If you want to know what your company is worth under the contract you have today, request a free and confidential valuation.