- Most commercial leases restrict assignment without the landlord's consent.
- Separately, the franchise agreement itself typically requires the franchisor's approval before ownership of the franchised business can change hands.
- Because the two processes are independent, satisfying one doesn't automatically move the other forward — and a delay in either can hold up closing regardless of how ready the other side is.
Selling or buying a franchised business in Ontario usually means clearing two separate approval hurdles that have nothing to do with each other, run on different timelines, and sit with two different people: the landlord, who controls whether the lease can be assigned, and the franchisor, who controls whether the buyer can take over the franchise.
Treat these as one combined approval and it's easy to lose track of what's actually needed for each, or to assume progress on one automatically helps the other. This article breaks the two tracks apart, explains what each is really about, and offers a practical way to sequence them.
Track One: Landlord Consent to the Lease
Most commercial leases restrict assignment without the landlord's consent. Under Ontario's Commercial Tenancies Act, where a lease includes that kind of restriction, consent is deemed not to be unreasonably withheld unless the lease says otherwise — but the lease's own terms still set the process first.
This track is fundamentally about the space: is the landlord comfortable with the buyer as a tenant, is the lease in good standing, and are there conditions the landlord wants attached to the assignment, such as updated insurance, a new deposit, or a guarantee.
Track Two: Franchisor Consent to the Buyer
Separately, the franchise agreement itself typically requires the franchisor's approval before ownership of the franchised business can change hands. This track is about the brand and the operator: does the buyer have the financial capacity and relevant experience to run the location, and will they complete any required training.
Franchise resales are also treated separately from an ordinary business sale under the Arthur Wishart Act — whether the transaction triggers a fresh disclosure obligation to the buyer as a prospective franchisee depends on the specific facts and shouldn't be assumed either way.
Why These Two Tracks Don't Run on the Same Clock
| Landlord Track | Franchisor Track | |
|---|---|---|
| What's being approved | The buyer as tenant, and the lease assignment | The buyer as franchisee and operator |
| Who controls the process | The landlord, per the lease terms | The franchisor, per the franchise agreement |
| What can hold it up | Existing arrears, lease conditions, extension needs | Financial vetting, experience review, training scheduling |
| Typical documents | Estoppel certificate, consent letter, assignment agreement | Financial statements, business plan, disclosure document if applicable |
Because the two processes are independent, satisfying one doesn't automatically move the other forward — and a delay in either can hold up closing regardless of how ready the other side is.
Sequencing the Two Approvals
- Start both conversations early and in parallel, rather than waiting to finish one before starting the other — each can take meaningfully different lengths of time to complete.
- Share the buyer's basic profile with both the landlord and the franchisor as soon as there's a signed letter of intent, so both approval processes can begin gathering what they need.
- Track each approval's specific outstanding requirements separately — a landlord's request for an updated certificate of insurance has nothing to do with a franchisor's request for a business plan, and conflating them risks missing one.
- Build the purchase agreement's closing conditions around both approvals, so the deal isn't legally obligated to close before either one is actually in hand.
- Confirm both approvals in writing before scheduling closing — a verbal indication of comfort from either the landlord or the franchisor isn't the same as an executed consent or approval letter.
Frequently asked questions
Which approval usually takes longer — the landlord's or the franchisor's?
It varies by deal and can't be assumed either way; some landlords respond quickly while a franchisor's financial vetting and training scheduling take longer, and sometimes the reverse is true. Start both early rather than guessing.
If the franchisor approves the buyer, does the landlord have to as well?
No — they're entirely separate approvals governed by different documents: the franchise agreement and the lease. A franchisor's approval carries no legal weight with the landlord.
Can the deal close if only one of the two approvals is in hand?
That depends on how the purchase agreement's closing conditions are drafted. Well-drafted agreements typically make both approvals conditions of closing, so the deal doesn't have to proceed without either one.
Who is usually responsible for driving these approvals forward — the buyer or the seller?
This is typically negotiated and specified in the purchase agreement itself. In many deals, the current franchisee, as seller, takes the lead on the landlord relationship, while the buyer takes the lead on their own franchisor application, with both sides coordinating throughout.
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