I want to buy an established franchise. Must all franchise employees remain in their jobs after the

A due diligence exercise should identify any potential costs or risks of taking on the business. It should include determining how many employees the franchised business employs. The significance of this is that in the UK there is a piece of legislation called the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’) that may protect the employment rights of employees of a business when that business is transferred to a new owner. The TUPE legislation is complex, but in basic terms applies to a transfer of an ‘undertaking’or part of an ‘undertaking’ from one person to another. When TUPE applies there is an automatic transfer of employment rights from the seller of the business to the buyer. It may also give protection to employees on a transfer of a business. Therefore, if TUPE applies it could mean that all employees of a business will be entitled to remain in their jobs after any transfer.  Whether TUPE will apply will depend on a number of factors, not least the nature of the transfer. A prudent purchaser should consider taking advice from an experienced employment lawyer, who should be able to advise on whether TUPE will apply in a particular case and the potential impact, which could be costly.