What happens to employee(s) in the situation where a business sells one of its stores to a franchisee? Does the employee(s) of the business affected (i.e. the employee(s) who work in the store sold to the franchisee) transfer to the franchisee company?

The TUPE Regulations may apply to this situation if the relevant criteria for there being a TUPE transfer are met (namely, whether there is a transfer of an economic entity which retains its identity post-transfer). In many cases the sale of a business to a franchisee for TUPE purposes will be no different to a typical business sale to a third party. 

The 1991 EAT decision in LMC Drains Limited& Another v Waugh which was decided before the 2006 TUPE Regulations, is also of assistance. In this case, the EAT held that the grant or assignment of a franchise agreement to carry on drain cleaning business amounted to a relevant transfer for the purpose of the 1981 Tupe Regulations. We can