I hate to answer this way, but: it depends.
A "silent partner" has all the same rights and responsibilities as a named partner, providing that the silent partner can prove that they are, in fact, a partner. This is typically done with a partnership agreement or demonstrating that the partner had an active role in the business through capital contributions, decision making, etc.
However, a silent partner cannot sell the business over the objections of other partners - if they exist. The sale of the business as a whole must be unanimous.
Additionally, the ability to sell the business may be controlled by the franchise agreement as well - depending on the franchise.
Selling a franchise is a very complicated undertaking. It is governed by the franchise agreement. The franchise agreement often names the categories of people who can take action upon the death of a franchisee. If you were a named franchisee (does not sound like it), you probably have greater rights. Franchise agreements often require action within a very short period of time and require that the buyer meet the franchisor's current qualifications.
You should immediately consult with an experienced franchise attorney who should be able to guide you through the process. Assuming the business is located in N.C., I would be happy to help you in identifying one or more experienced franchise attorneys. Feel free to contact me. No charge for making referrals.
As a franchise attorney I can say that virtually all franchise agreements require prior approval of the franchisor before any sale of the business. Typically that approval process includes the proposed buyer, terms of sale, etc. In the case of death, franchise contracts usually provide that the estate or other representative of the deceased franchisee transfer the franchise to an "approved" person or entity, within a prescribed time period, subject to the franchisor's approval process just described.
The details are contained in the franchise agreement and you should have a franchise attorney review it before doing anything.
Kevin B. Murphy, B.S., M.B.A., J.D.
Attorney at Law & Franchise Expert
Director of Operations - Mr. Franchise
FRANCHISE FOUNDATIONS APC
Your question is quite complex and involves both the business/partnership and franchise. Taking the franchise aspect first, you will need to review the franchise agreement to see what your rights are to sell or transfer the business. Typically, the franchisor must approve the new owner (the franchisor will have certain stipulated criteria), approve the sale price, require certain updates to the business, require the new owner to sign a new franchise agreement and either the seller or the buyer will be required to pay a transfer fee. In addition, the seller will likely have to sign a General Release in the form required by the franchisor. Sometimes franchisors also require the right of first refusal - meaning they have the right to buy the business at the same deal/price as the offer you present to them.
As far as the sale of the business, aside from the franchise aspects, it will depend on what type of entity you are - LLC or general or limited partnership or corporation and what percentage of ownership you have. It will also depend on the agreement that was entered into between you and your partner[s]. Lastly, it may also depend on estate laws for your state - the spouse (if any) or heirs of the partner may have rights.
As you can see, this is a complex question and you should consult an attorney who is experienced in franchise and business law.
If you found my reply helpful, please mark it as a "best answer".
This response does not create an attorney-client relationship and is not intended to provide legal advice for your specific situation.
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