Franchise Transfer and Change of Control in Turkey

on July 21, 2026

Introduction

The transfer of a franchise business can take several legally different forms.

A franchisee may wish to assign the complete franchise agreement to a new operator, sell the assets of the outlet, transfer the shares of the company operating the franchise or admit a new investor who obtains direct or indirect control of the franchisee.

Although these transactions may produce a similar commercial result, they are not legally identical.

An assignment of the franchise agreement replaces the existing franchisee with a new contractual party. A share sale ordinarily leaves the franchisee company unchanged but changes the persons controlling that company. An asset sale may transfer equipment, stock and business operations without automatically transferring the franchise agreement, trademark licence or lease.

These distinctions are critical under Turkish law.

Article 205 of the Turkish Code of Obligations defines a contract transfer as an agreement under which the transferring party’s complete contractual status, including its rights and obligations, passes to the transferee. The remaining contractual party must participate in the transfer, approve it in advance or ratify it afterwards. The transfer must also comply with the form required for the original contract.

A franchisee therefore cannot ordinarily sell or assign the franchise relationship to a third party without the franchisor’s consent.

The position may be different where the shareholders of the franchisee company sell their shares. The company that signed the franchise agreement remains the contractual franchisee. However, most professionally drafted franchise agreements treat certain share transfers, mergers and changes in voting control as contractual changes of control requiring the franchisor’s approval.

The franchise agreement should regulate both forms of transaction. A clause prohibiting only “assignment of the agreement” may not prevent a shareholder from selling the company itself. Conversely, an excessively broad change-of-control provision may interfere with ordinary financing, family succession, internal restructuring or minority investment.

This guide examines franchise transfers and changes of control in Turkey, including contractual assignment, corporate share transfers, trademark rights, business premises, guarantees, merger control, succession and drafting recommendations.

What Is a Franchise Transfer?

A franchise transfer generally occurs where the existing franchisee leaves the contractual relationship and another person or company becomes the franchisee.

The transferee then assumes the rights and obligations associated with the franchise system, including:

The right to use the trademark;
The right to use the franchisor’s know-how;
The obligation to pay royalties;
Compliance with the operations manual;
Quality-control obligations;
Confidentiality;
Reporting;
Supplier requirements;
Post-termination restrictions.

The commercial sale of an outlet does not automatically achieve this legal result.

The outgoing franchisee may sell furniture, equipment, inventory and goodwill while remaining the contractual franchisee unless the franchise agreement is also transferred validly.

Similarly, the purchaser does not acquire the right to use the trademark merely because it has purchased the physical business.

A complete franchise transfer should therefore coordinate at least four separate matters:

Transfer of the franchise agreement;
Transfer or continuation of the trademark licence;
Transfer of the premises or lease;
Transfer of assets, employees, data and operational systems.

Each element should be reviewed independently.

Contract Transfer Under Article 205 of the Turkish Code of Obligations

A franchise agreement is a continuing contract containing reciprocal rights and obligations.

The franchisee cannot ordinarily transfer its complete contractual position through a unilateral notice to the franchisor.

Article 205 of the Turkish Code of Obligations provides that contract transfer may be completed through a tripartite agreement between the transferor, transferee and remaining party.

It may also be completed through an agreement between the transferor and transferee where the remaining party has given prior permission or subsequently approves the transaction.

In a franchise transaction:

The outgoing franchisee is the transferor;
The incoming franchisee is the transferee;
The franchisor is the remaining contractual party.

The franchisor’s consent is important because the identity, financial capacity, reputation and management ability of the franchisee are central to the commercial relationship.

A franchise agreement is not ordinarily treated as a freely transferable financial asset.

The franchisor granted rights to a selected operator based on criteria such as:

Business experience;
Financial resources;
Management team;
Reputation;
Proposed ownership structure;
Compliance capability;
Commitment to the brand.

The transferee should therefore undergo a new approval and due diligence process.

Assignment of Rights Is Not the Same as Transfer of the Contract

A franchisee may attempt to transfer only a particular receivable or economic benefit rather than the complete agreement.

For example, it may assign:

A payment claim against the franchisor;
A reimbursement right;
Sale proceeds;
A specific contractual receivable.

Assignment of an individual claim is legally different from transfer of the complete contractual relationship.

The franchise agreement may also restrict assignment of individual claims, particularly where the identity of the creditor or confidentiality is important.

The parties should distinguish clearly among:

Assignment of receivables;
Assumption of debt;
Transfer of the complete contract;
Subcontracting;
Temporary management;
Share transfer.

A temporary management agreement does not necessarily make the manager the franchisee.

Similarly, a purchaser paying the former franchisee’s debts does not automatically become entitled to the franchise rights.

Transfer of the Trademark Licence

The right to use the brand is a central part of the franchise relationship.

Article 24 of the Industrial Property Code provides that a trademark licence may be exclusive or non-exclusive. Unless the licence agreement states otherwise, a licensee may not transfer its licensed rights to a third party or grant a sublicense.

This means that the outgoing franchisee cannot independently transfer the trademark licence to the purchaser of the outlet unless the relevant agreement permits it.

A valid transaction will normally require one of the following structures:

The franchisor consents to the transfer of the existing franchise and licence;
The franchisor terminates the old agreement and signs a new agreement with the purchaser;
The parties execute a transfer and assumption agreement expressly covering the trademark rights;
The transferee receives a temporary licence during an approved transition period.

The transferee should not begin using the trademark merely because the asset-purchase agreement has been signed.

Use before the franchisor’s approval may constitute unauthorised trademark use and may expose both the transferor and transferee to contractual and intellectual property claims.

Transfer of the Agreement Versus Sale of the Franchisee Company

The distinction between a contract transfer and a share transfer is fundamental.

Contract Transfer

The contractual franchisee changes.

The outgoing operator leaves the agreement, and the purchaser becomes the new franchisee.

The franchisor’s consent is normally necessary under Article 205.

Share Transfer

The legal entity that signed the franchise agreement remains the same.

Only the shareholders of that company change.

The company continues to own the assets, employ personnel, occupy the premises and owe royalties.

As a matter of general contract structure, a share sale does not automatically constitute a transfer of the franchise agreement because the contractual party has not changed.

However, the franchise agreement may define a share transfer as a change of control requiring approval.

Without such a provision, the shareholders may potentially sell the franchisee company while the franchisor remains contractually bound to the same legal entity under entirely new ownership.

What Constitutes a Change of Control?

A change of control is broader than the transfer of more than 50% of a company’s registered share capital.

Control may arise through legal rights, contractual arrangements or practical decision-making power.

The Turkish Competition Authority’s updated 2026 guidance defines control by reference to rights, contracts or other means that provide the ability to exercise decisive influence over a business.

Control may result from ownership of assets, voting rights, rights affecting the formation or decisions of corporate bodies or the practical ability to exercise those rights.

A franchise change-of-control clause may therefore cover:

Transfer of a majority of voting rights;
Transfer of the right to appoint most directors or managers;
Sale of a controlling shareholder’s shares;
Creation of joint control;
Shareholders’ agreements granting veto rights over strategic decisions;
Merger with another company;
Transfer of the franchise business to a new corporate group;
Enforcement of a share pledge;
Acquisition of control by a creditor or investment fund;
Indirect change in the franchisee’s ultimate parent company;
Transfer of beneficial ownership.

The agreement should define which strategic decisions are relevant.

Ordinary minority protections concerning amendments to the articles of association or liquidation do not always amount to control. Veto rights over budget, business plan, senior management or major investment are more likely to indicate decisive influence.

Minority Share Transfers

Not every minority share transfer should require the same approval procedure as a complete sale of the company.

A 5% passive investment may not affect management or the commercial identity of the franchisee.

However, minority rights may become significant where the investor receives:

Board appointment rights;
Veto rights;
Access to confidential know-how;
Rights over the business plan;
Rights concerning suppliers or pricing;
Conversion rights capable of producing control;
A strategic relationship with a competitor.

A well-drafted agreement may establish different thresholds.

For example:

Prior notice for transfers below 10%;
Franchisor approval for transfers of 10% or more;
Mandatory approval for any transfer producing control;
Absolute prohibition on transfers to competitors or sanctioned persons.

The clause should also prevent a series of small transfers from avoiding the approval requirement.

Related transfers completed within a defined period may be aggregated.

Share Transfers in Turkish Limited Liability Companies

Many Turkish franchisees operate as limited liability companies.

Article 595 of the Turkish Commercial Code requires the transfer of a limited company’s capital share and the transaction creating the transfer obligation to be made in writing, with the parties’ signatures notarised.

Unless the company’s articles provide otherwise, general assembly approval is required, and the transfer becomes valid with that approval.

The articles may permit the general assembly to reject approval without giving reasons or may prohibit transfers entirely. If the general assembly does not reject the application within three months, approval is deemed to have been given.

The transfer should also be entered in the company’s share ledger and registered with the trade registry through the required procedure.

Accordingly, a transfer of a limited company operating a franchise may require several separate approvals:

Compliance with Turkish corporate-law formalities;
Approval under the company’s articles of association;
Approval under any shareholders’ agreement;
Franchisor consent under the franchise agreement;
Landlord or regulatory consent where applicable.

Satisfying the corporate-law conditions does not replace the franchisor’s contractual approval.

Similarly, franchisor consent does not eliminate the formalities required for a valid limited-company share transfer.

Share Transfers in Turkish Joint-Stock Companies

The general principle for registered shares in a Turkish joint-stock company is free transferability unless the law or the articles of association provide otherwise.

Article 490 of the Turkish Commercial Code states that registered shares may generally be transferred without restriction.

The articles may nevertheless make a transfer subject to company approval. For unlisted registered shares, the company may refuse approval based on an important reason stated in the articles or may offer to purchase the shares at their actual value for itself, existing shareholders or a third party.

The articles cannot impose restrictions beyond the statutory framework.

Until the required approval is given in applicable cases, ownership and the rights attached to the shares may remain with the transferor.

Where the company fails to reject an approval request within the statutory period or the rejection is unjustified, approval may be deemed granted.

The franchise agreement remains a separate layer.

Even where joint-stock company shares are freely transferable under corporate law, the transfer may breach a contractual change-of-control clause.

The company may therefore remain the lawful owner of the franchise rights while also becoming exposed to termination or damages under the franchise agreement.

Why Franchisor Consent Is Usually Required

The franchisor has a legitimate interest in ensuring that the new owner can operate the franchise system properly.

Approval criteria may include:

Financial strength;
Business and sector experience;
Operational capacity;
Compliance history;
Reputation;
Ultimate beneficial ownership;
Absence of conflicts with competing brands;
Ability to complete training;
Ability to satisfy development obligations;
Acceptance of the current franchise standards.

The agreement should distinguish between approval of the transferee and approval of the transaction documents.

The franchisor may approve the person but require changes to the proposed structure, financing or guarantees.

For example, the franchisor may object where:

The buyer is heavily leveraged;
The purchase price will prevent adequate working capital;
The seller will retain hidden control;
A competitor finances the acquisition;
The buyer lacks the required licences;
The transfer divides the outlet assets from the operating company.

Consent should be documented formally.

Informal awareness of negotiations should not be treated automatically as approval.

Can the Franchisor Refuse Consent Without Giving a Reason?

There is no universal Turkish franchise rule requiring every franchisor to approve a proposed transfer or prohibiting refusal without reasonable cause.

The answer depends primarily on the agreement.

A clause may provide that consent:

May be withheld in the franchisor’s absolute discretion;
May not be unreasonably withheld;
May be refused only on listed grounds;
Is deemed granted if no response is given within a specified period.

Where the contract requires reasonable approval, the franchisor should evaluate the buyer against objective and consistently applied criteria.

Potentially reasonable refusal grounds may include:

Insufficient financial resources;
Lack of relevant management experience;
Association with a competitor;
Criminal or regulatory history relevant to the business;
Inability to obtain required licences;
Refusal to complete training;
Proposed ownership concealment;
Significant reputational risk;
Sanctions or money-laundering concerns;
Failure to provide required guarantees.

A refusal based solely on an intention to take over a successful outlet at a lower price may create good-faith and contractual concerns, particularly where the agreement promises that consent will not be unreasonably withheld.

Transfer Approval Procedure

The agreement should establish a transparent transfer process.

The franchisee may be required to provide:

Buyer’s corporate documents;
Shareholding chart;
Ultimate beneficial ownership information;
Financial statements;
Source of funds;
Business experience;
Proposed management team;
Financing arrangements;
Draft sale agreement;
Proposed closing date;
Regulatory approvals;
Lease-transfer plan.

The franchisor should have a defined period within which to respond.

An unlimited approval period may prevent the franchisee from completing a commercially viable sale.

A practical clause may provide:

An initial completeness review;
A fixed evaluation period;
Written reasons for refusal where required;
Additional information requests;
Conditional approval;
Expiry of approval if closing does not occur within a specified period.

The parties should also state whether silence constitutes approval or rejection.

Transfer Fee

Franchise agreements frequently require a transfer fee.

The fee may compensate the franchisor for:

Reviewing the proposed buyer;
Due diligence;
Training;
Preparing new contracts;
Updating software;
Inspecting and renovating the premises;
Administrative work.

The amount should be stated or objectively calculable.

A fee equal to a substantial percentage of the sale price may affect the commercial value of the franchisee’s exit.

The agreement should clarify:

Who pays the fee;
When it becomes due;
Whether it is refundable if consent is refused;
Whether training costs are additional;
Whether tax is included;
Whether transfers to affiliates or family members are exempt.

A transfer fee should not be confused with the initial franchise fee payable by the incoming operator.

The franchisor may require one, both or neither, depending on the agreement.

Requirement to Sign the Current Form of Franchise Agreement

The franchisor may condition approval on the buyer signing its then-current franchise agreement.

This creates a practical issue because the purchaser may not receive the same rights as the seller.

The new agreement may contain:

Higher royalties;
Reduced territory;
New online-sales provisions;
Increased advertising contributions;
New technology fees;
Different renewal rights;
Broader guarantees;
Updated non-compete restrictions.

The sale price should reflect this possibility.

The transferor cannot market the transaction as a sale of its complete remaining franchise term if the franchisor may require an entirely new agreement.

The transfer clause should explain whether:

The buyer assumes the remaining term;
A new full term begins;
Existing territorial rights remain;
New economic conditions apply;
The buyer must renovate before closing.

Training and Certification of the Transferee

The incoming franchisee or its managers may be required to complete training before closing.

The agreement should specify:

Participants;
Training duration;
Location;
Language;
Examination requirements;
Costs;
Consequences of failure;
Whether temporary management is permitted.

Training should be completed early enough to avoid a gap in operations.

A purchaser should not acquire the assets and employees before knowing whether it can satisfy the franchisor’s certification requirements.

The sale agreement may therefore make completion conditional on:

Franchisor approval;
Training certification;
Lease transfer;
Regulatory approval;
Financing;
Execution of the new franchise agreement.

Rights of First Refusal and Rights of First Offer

A franchisor may seek priority where the franchisee decides to sell.

A right of first refusal generally allows the franchisor to purchase the business on the same material terms offered by a third party.

A right of first offer requires the franchisee to offer the business to the franchisor before negotiating freely with third parties.

These rights should regulate:

The assets or shares covered;
The notice procedure;
Information to be provided;
The response period;
Matching of non-cash consideration;
Changes to third-party terms;
Related-party transfers;
Closing timetable;
Confidentiality.

The clause should not give the franchisor an indefinite right that prevents the franchisee from marketing the business.

A right of first refusal should also address complex consideration such as earn-outs, seller financing, employment arrangements or bundled property sales.

Purchase Options

A franchise agreement may grant the franchisor an option to purchase the franchise business following:

Proposed transfer;
Expiry;
Termination;
Death;
Insolvency;
Serious breach.

The option should identify the price or valuation method.

Possible valuation methods include:

Independent expert valuation;
Fair market value;
Multiple of earnings;
Net asset value;
Agreed formula;
Third-party offer price.

The agreement should state whether the value includes:

Equipment;
Inventory;
Lease rights;
Local goodwill;
Customer relationships;
Digital accounts;
Working capital;
Liabilities.

An option allowing the franchisor to purchase at book value after the franchisee has developed a highly successful location may create a severe commercial imbalance.

The valuation mechanism should be tested before signing.

Asset Sale of the Franchise Business

An asset sale may include:

Equipment;
Furniture;
Inventory;
Vehicles;
Intellectual property created locally;
Customer contracts;
Employees;
Lease rights;
Digital accounts;
Permits.

The franchise agreement and trademark licence do not necessarily transfer with those assets.

The purchaser should identify which assets can legally be transferred and which require third-party consent.

Sector-specific licences may be personal to the operating company and may require a new application.

Payment-service, marketplace and software accounts may also be non-transferable under their own terms.

The asset-purchase agreement should therefore include conditions precedent and detailed transfer schedules.

Transfer of the Commercial Lease

A franchise outlet cannot usually continue at the same premises unless the purchaser obtains the lease or another valid right of occupation.

Article 323 of the Turkish Code of Obligations requires the landlord’s written consent for transfer of the lease relationship.

In workplace leases, the landlord cannot refuse consent without a justified reason.

The incoming tenant replaces the outgoing tenant, but the outgoing tenant remains jointly liable with the transferee until the lease expires and, in any event, for no more than two years.

The transfer process should therefore coordinate:

Franchisor approval;
Landlord approval;
Shopping-centre management approval;
Security deposit;
Rent guarantees;
Permitted use;
Signage rights;
Renovation obligations.

A share sale may avoid formal transfer of the lease because the tenant company remains the same.

However, the lease itself may contain a change-of-control clause requiring landlord consent.

Employees and Business Transfer

The transfer of a franchise outlet may also affect employees.

An asset or business transfer may trigger employment-law rules concerning transfer of the workplace or part of the workplace.

A share transfer generally does not change the employer because the company remains the same.

The parties should review:

Employee list;
Accrued annual leave;
Wages and bonuses;
Severance exposure;
Pending claims;
Social security records;
Occupational health and safety;
Confidentiality and training obligations.

The franchise agreement should not assume that employees automatically become employees of the franchisor or purchaser in every transaction.

Employment consequences require a separate legal assessment based on the transfer structure.

Customer Contracts, Gift Cards and Prepaid Services

A purchaser may inherit practical responsibility for customer obligations even where the contractual position is uncertain.

The transfer documents should address:

Pending orders;
Deposits;
Gift cards;
Memberships;
Reservations;
Warranty claims;
Returns;
Loyalty points;
Customer complaints.

Consumers should be informed accurately about the identity of the new seller or provider.

The internal agreement between the seller and purchaser cannot remove mandatory consumer rights.

The parties should create a reconciliation mechanism for obligations arising before and after closing.

Customer Data and Digital Accounts

Customer databases, social-media accounts and online reviews can represent substantial value.

However, personal data cannot be transferred solely because the purchase agreement labels it as an asset.

The parties should identify:

The data controller;
Purposes of processing;
Legal basis for transfer;
Privacy notices;
Customer expectations;
Retention obligations;
International transfers;
Security measures.

Digital assets should be listed separately, including:

Domain names;
Local websites;
Social-media pages;
Marketplace accounts;
Delivery-platform profiles;
Advertising accounts;
Telephone numbers;
E-mail addresses;
Application access.

A branded account may need to be transferred to the franchisor rather than to the purchaser where the buyer is not approved.

Access should not be released until the relevant franchise rights become effective.

Personal Guarantees and Release of the Seller

The outgoing franchisee’s shareholders may have given personal guarantees.

A transfer of the business does not automatically release those guarantors.

The transfer documents should state whether:

The seller is released from future obligations;
Existing guarantees are cancelled;
The buyer provides replacement guarantees;
The seller remains liable for pre-closing breaches;
Claims discovered after closing remain covered;
Security deposits are returned or transferred.

The outgoing party should obtain an express written release.

A statement that the buyer has assumed the agreement may not be sufficient to release the seller from separate guarantees, indemnities or accrued liabilities.

Liability for Pre-Transfer Breaches

The transfer should distinguish between liabilities arising before and after closing.

The seller may remain responsible for:

Unpaid royalties;
Under-reported sales;
Employee claims;
Tax liabilities;
Data breaches;
Consumer claims;
Trademark misuse;
Regulatory violations.

The purchaser may assume some liabilities contractually, but that internal allocation does not necessarily bind the franchisor, employees, consumers or public authorities.

The transfer agreement should contain:

Representations and warranties;
Indemnities;
Disclosure schedules;
Escrow or retention;
Limitation periods;
Liability caps;
Claims procedures.

The franchisor should specify whether its consent releases the outgoing franchisee.

Consent alone should not be assumed to waive unknown claims.

Death, Incapacity and Family Succession

A franchise operated by an individual or family-owned company may face succession issues.

The agreement should address what happens if a key owner:

Dies;
Loses capacity;
Becomes seriously ill;
Withdraws from management;
Becomes bankrupt.

Shares may pass through inheritance, but the heirs may not possess the experience, financing or licences required to operate the franchise.

The agreement may provide:

A temporary management period;
Appointment of an approved manager;
A period for heirs to qualify;
Sale to an approved buyer;
Franchisor purchase option;
Termination if no qualified successor is found.

The procedure should be commercially realistic and should avoid immediate closure where continuity can be protected.

Corporate and inheritance rules must be coordinated with the contractual approval mechanism.

Transfers to Affiliates and Internal Reorganisations

A corporate franchisee may need to reorganise without changing the ultimate beneficial ownership.

Examples include:

Transfer to a wholly owned subsidiary;
Merger of group companies;
Conversion of company type;
Internal holding-company restructuring;
Tax-neutral reorganisation;
Transfer to a special-purpose operating company.

The agreement may exempt these transactions from full approval if:

Ultimate control does not change;
The transferee assumes all obligations;
Financial capacity is not reduced;
Guarantees remain effective;
The transaction does not involve a competitor;
The franchisor receives advance notice.

A corporate reorganisation should not be used to avoid the change-of-control clause.

The agreement may require the franchisee to provide a pre- and post-transaction ownership chart and written confirmation of continuing ultimate control.

Mergers and Corporate Transformations

A merger may cause the franchisee to combine with another company or cease to exist as a separate legal entity.

The transaction may produce:

Universal succession;
Transfer of the franchise agreement by operation of law;
Change in control;
Entry of new shareholders;
Transfer of assets and liabilities.

Even where corporate law provides succession, the franchise agreement may give the franchisor rights concerning mergers, structural changes and ownership.

The franchisee should notify the franchisor before the transaction becomes irreversible.

The parties should also confirm that trademark, software, supply and lease arrangements continue legally after the merger.

Turkish Merger-Control Notification

A significant acquisition or change of control may require notification to the Turkish Competition Authority.

The decisive factor is not whether the transaction is described as a franchise transfer or share sale. The issue is whether it creates a lasting change in control and satisfies the applicable turnover thresholds.

The Competition Authority’s updated 2026 guidance states that a transaction may constitute a concentration where control of all or part of a business is acquired through shares, assets, contract or another means.

Minority acquisitions that do not produce control and purely internal group restructurings generally fall outside the concentration definition.

The notification thresholds were increased in February 2026.

Under the updated framework, the principal thresholds include:

Combined Turkish turnover exceeding TRY 3 billion and Turkish turnover of at least two transaction parties individually exceeding TRY 1 billion; or
Turkish turnover of the acquired business or relevant merger party exceeding TRY 1 billion and worldwide turnover of at least one other transaction party exceeding TRY 9 billion.

The technology-undertaking rules contain additional provisions and should be reviewed separately where applicable.

Most single-outlet franchise transfers will not reach these thresholds.

However, the issue may become relevant in acquisitions of national master franchisees, large multi-unit operators, major retail networks or technology-based franchise platforms.

Where notification is required, the transaction should not be completed before clearance.

Financing and Share Pledges

A lender financing the franchise acquisition may request security over:

Shares;
Equipment;
Receivables;
Bank accounts;
Inventory;
Franchise proceeds.

A share pledge may create a future change-of-control risk if enforcement allows the lender or purchaser at enforcement to obtain voting or management rights.

The franchise agreement should address:

Whether share pledges require consent;
Whether ordinary financing is permitted;
Whether enforcement constitutes a transfer;
Notice to the franchisor;
Cure periods;
Rights of the lender;
Replacement operator arrangements.

A blanket prohibition on all security may make franchise financing unnecessarily difficult.

A balanced clause may permit security in favour of regulated financial institutions while preserving franchisor approval over any enforcement transfer.

Consequences of an Unauthorised Transfer

An unauthorised assignment or change of control may constitute a material breach.

Possible contractual consequences include:

Suspension of franchise rights;
Immediate termination;
Contractual penalties;
Damages;
Refusal to recognise the transferee;
Cessation of trademark use;
Loss of renewal rights;
Acceleration of outstanding amounts.

The appropriate consequence depends on the seriousness of the breach.

An inadvertent minority transfer may justify notice and a cure period.

A deliberate secret sale to a competitor may justify immediate action.

The franchisor should avoid continuing to accept royalties and exercise control for a long period while remaining silent about a known transfer if it intends to rely on the breach.

Its conduct may later become relevant to arguments concerning waiver, consent or good faith.

Disputes Concerning Transfer Approval

A transfer dispute may involve claims that:

The franchisor withheld consent unreasonably;
The buyer failed approval criteria;
Consent was given orally;
The transfer fee was excessive;
The franchisor exercised a purchase option improperly;
The franchisor delayed until the sale failed;
The seller concealed liabilities;
The transfer triggered termination.

The claimant should preserve:

Formal transfer request;
Buyer information;
Correspondence;
Approval criteria;
Response dates;
Valuation reports;
Sale agreements;
Training records;
Reasons for refusal.

Commercial monetary claims may require mandatory mediation before litigation.

The franchise agreement may instead provide for arbitration.

Urgent protection may be required where the buyer has begun using the trademark or where the franchisor threatens immediate closure before the approval dispute is resolved.

Drafting Recommendations for Franchisors

A franchisor should ensure that the transfer clause:

Prohibits unauthorised transfer of the complete agreement;
Regulates direct and indirect changes of control;
Defines control objectively;
Covers mergers and share pledges;
Aggregates related minority transfers;
Identifies prohibited transferees;
Establishes buyer approval criteria;
Specifies required documents;
Provides a response period;
Regulates training;
States transfer and initial fees;
Addresses the current form of agreement;
Preserves claims against the seller;
Requires replacement guarantees;
Coordinates trademark, lease and digital assets;
Regulates death and incapacity;
Provides reasonable internal-restructuring exceptions;
Preserves competition-law compliance.

The clause should protect the network without making every minor corporate event a termination trigger.

Drafting Recommendations for Franchisees

A franchisee should negotiate:

Objective approval criteria;
A defined response period;
A rule that consent will not be unreasonably withheld;
Reasonable transfer fees;
Exemptions for passive minority investment;
Exemptions for internal restructuring;
A workable family-succession process;
Transfer rights on death or incapacity;
Release of personal guarantees;
Clear valuation of purchase options;
Protection against arbitrary loss of sale proceeds;
Treatment of the remaining franchise term;
Coordination with the lease.

The franchisee should also review whether its articles of association and shareholders’ agreement permit the proposed transfer.

A commercially valuable right to sell the franchise is of limited use where corporate, landlord or franchisor approvals cannot realistically be obtained.

Franchise Transfer Checklist

Before transferring a franchise business in Turkey, the parties should confirm that:

The proposed transaction structure is identified.
Contract assignment is distinguished from a share sale.
Franchisor consent requirements are understood.
The change-of-control definition has been reviewed.
Corporate share-transfer formalities are satisfied.
The trademark licence can be transferred or replaced.
The transferee satisfies approval criteria.
Ultimate beneficial owners are disclosed.
The buyer has adequate financing and working capital.
Transfer fees are calculated.
The applicable franchise agreement form is known.
Training requirements are completed.
Rights of first refusal or options are satisfied.
The lease can be transferred or continued.
Employees and accrued liabilities are reviewed.
Consumer obligations are allocated.
Customer-data transfers are lawful.
Digital accounts are listed and transferable.
Personal guarantees are released or replaced.
Pre-closing liabilities are allocated.
Required regulatory licences are obtained.
Merger-control thresholds are assessed.
Financing security does not create an unauthorised control change.
Closing is conditional on all required approvals.
Post-closing notifications and registrations are completed.

Conclusion

Franchise transfer and change of control in Turkey should be analysed according to the legal structure of the proposed transaction.

An assignment of the franchise agreement changes the contractual party and ordinarily requires the franchisor’s participation, prior permission or subsequent approval under Article 205 of the Turkish Code of Obligations.

A share transfer is different because the franchisee company remains the same legal entity. Nevertheless, the franchise agreement may require consent where the company’s ownership, voting rights, management or ultimate control changes.

The agreement should define control broadly enough to cover indirect and contractual control but should not treat every minor investment as equivalent to a complete sale.

Turkish corporate-law requirements must also be observed.

Limited-company share transfers require a written agreement with notarised signatures and, unless the articles provide otherwise, general assembly approval.

Joint-stock company shares are generally transferable, but statutory and articles-based restrictions may apply.

Corporate validity does not replace the franchisor’s contractual consent.

Trademark rights require separate attention. A franchisee cannot ordinarily transfer licensed trademark rights or grant a sublicense unless the agreement permits it.

The business purchaser should not use the brand before receiving valid authority.

The transfer must also be coordinated with the commercial lease, employees, customer obligations, personal data, digital accounts, guarantees and existing liabilities.

The seller should obtain an express release from future obligations. The buyer should identify all pre-closing liabilities and should not assume that franchisor approval confirms the financial or legal quality of the business.

Significant acquisitions of master franchisees or national networks may also require Turkish merger-control review. The 2026 rules use updated turnover thresholds and focus on lasting changes of control.

A balanced franchise transfer clause protects the franchisor’s ability to select operators while preserving the franchisee’s legitimate ability to realise the value of the business it has developed.

The most effective structure is a documented approval process with objective criteria, fixed deadlines, coordinated closing conditions and clear allocation of liabilities before and after the transfer.

Frequently Asked Questions

Can a franchisee sell its franchise without the franchisor’s consent?

Ordinarily, the complete franchise agreement cannot be transferred without the franchisor’s consent or participation.

What is a contract transfer?

It is a transaction under which the transferor’s complete contractual status, including its rights and obligations, passes to the transferee.

Does Article 205 require the franchisor’s consent?

Yes. The remaining contractual party must participate, give prior permission or approve the transfer afterwards.

Is a share sale the same as a franchise transfer?

No. In a share sale, the franchisee company remains the contractual party. Its owners change.

Can the franchise agreement require approval for a share sale?

Yes. A change-of-control clause may require approval for direct or indirect changes in ownership, voting or management control.

Does every minority investment constitute a change of control?

No. The answer depends on voting rights, board rights, veto powers, shareholder agreements and practical influence.

How are limited-company shares transferred in Turkey?

The transfer agreement must be in writing, the signatures must be notarised and, unless the articles provide otherwise, general assembly approval is required.

Are joint-stock company shares freely transferable?

Registered shares are generally transferable unless the law or articles provide an applicable restriction.

Does a valid corporate share transfer eliminate the need for franchisor consent?

No. Corporate validity and contractual compliance are separate matters.

Can the trademark licence be transferred automatically?

No. Unless the agreement permits it, a trademark licensee cannot transfer licensed rights or grant a sublicense.

Can the buyer use the brand before closing?

It should not do so unless the franchisor has granted valid temporary or permanent authority.

Can the franchisor refuse every proposed buyer?

The answer depends on the agreement. A clause may require reasonable and objective evaluation or may grant broader discretion.

What are reasonable grounds for refusal?

Possible grounds include inadequate financing, lack of experience, regulatory concerns, competitor involvement, reputational risk and refusal to complete training.

Can the franchisor charge a transfer fee?

Yes, where the agreement provides for it. The amount and payment conditions should be clear.

Can the buyer be required to sign a new franchise agreement?

Yes, if the transfer clause permits this. The buyer should review the new economic and territorial terms before agreeing to the purchase price.

What is a right of first refusal?

It allows the franchisor to purchase the business on the same material terms offered by a third party.

Does the lease transfer automatically with the franchise?

No. The landlord’s written consent is generally required for transfer of the lease relationship.

Can a workplace landlord refuse lease transfer?

The landlord cannot refuse without justified cause, although the circumstances of the proposed transferee remain relevant.

Does the outgoing tenant remain liable?

In workplace leases, the outgoing tenant may remain jointly liable with the incoming tenant until the lease ends and for no longer than two years.

What happens to personal guarantees?

They do not necessarily end automatically. The outgoing guarantor should obtain an express written release.

Who is liable for unpaid royalties before closing?

This depends on the franchise and transfer documents. The franchisor may retain claims against the outgoing franchisee unless an express release is given.

Can customer data be sold with the business?

Only where the transfer complies with personal data protection requirements. Contractual asset language alone is insufficient.

What happens if the franchise owner dies?

The agreement may allow temporary management, qualification of heirs, sale to an approved buyer or exercise of a purchase option.

Do internal group restructurings require approval?

They may, depending on the agreement. A limited exemption can be negotiated where ultimate control remains unchanged.

Can a franchise transfer require Competition Authority approval?

A large transaction producing a lasting change of control may require notification if the applicable turnover thresholds are met.

What happens if the franchise is transferred without consent?

The franchisor may have rights to terminate, claim damages, impose contractual penalties and stop unauthorised trademark use.

This article provides general legal information as of July 2026 and does not constitute legal, corporate, competition, tax or investment advice. Franchise transfers should be reviewed according to the transaction structure, franchise agreement, company type, trademark rights, lease, financing and current Turkish legislation.

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