non-compete prior to sale
My employer recently sold his franchise to an out of state owner. Does my non-compete with him carry over to the new owners even if we left before the sale was complete?
1 answer | asked Apr 14, 2004 11:05 PM [EST] | applies to Arizona
Answers (1)
Sale of Business probably doesn't negate non-compete
The answer to your question is "probably yes." When a franchise is sold, it would ordinarily involve the sale of all of the assets of the business, from the furniture to the accounts receivable. Your non-compete agreement is an asset of the business. It has no value to the old owner, so there is no reason for him to keep it. On the other hand, the buyer would want it for the same reason he wants the rest of the business assets. It is part of what gives the business value as an ongoing business. If you want to find out whether it has been included in the sale, ask the old owner. He wouldn't have any reason to keep you from going to work for a competitor now that he is no longer in the business. Or you could simply violate the agreement and find out when the new owner sues you.
posted by Francis Fanning | Apr 15, 2004 1:05 PM [EST]
The answer to your question is "probably yes." When a franchise is sold, it would ordinarily involve the sale of all of the assets of the business, from the furniture to the accounts receivable. Your non-compete agreement is an asset of the business. It has no value to the old owner, so there is no reason for him to keep it. On the other hand, the buyer would want it for the same reason he wants the rest of the business assets. It is part of what gives the business value as an ongoing business. If you want to find out whether it has been included in the sale, ask the old owner. He wouldn't have any reason to keep you from going to work for a competitor now that he is no longer in the business. Or you could simply violate the agreement and find out when the new owner sues you.
posted by Francis Fanning | Apr 15, 2004 1:05 PM [EST]
Answer This Question
Sign In to Answer this Question
Related Questions with Answers