Glossary · Doing the deal
Assignability Clause
In short
A contract term that dictates whether a party can transfer its rights and obligations to a third party. As a buyer, you need key contracts to be assignable to your new entity.
What it means in a deal
During due diligence, review all significant contracts (leases, vendor agreements, customer contracts) for assignability. If a contract is not assignable or requires consent, work with the seller to secure that consent before closing to ensure continuity of operations.
Related terms
Common questions about Assignability Clause
- What if a proposed franchise agreement includes a clause restricting the borrower's operational control or management?
- Can a seller note on full standby have an acceleration clause if the business defaults on the SBA loan?
- What specific franchise agreement clauses are generally unacceptable to the SBA and could prevent financing?
- How does the SBA review franchise agreements for compliance if there are unusual clauses regarding termination or transfer?
- What specific types of clauses in a franchise agreement would constitute "undue control" by the franchisor, rendering it ineligible for 7(a) financing?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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