Can A Franchise Agreement Be Terminated?

Submitted by Mr. Blue MauMau on Tue, 2006/05/09 - 14:41.

It depends on whether the franchise owner has complied with the franchise agreement or if the franchisor kept their promises in the agreement. Usually franchise agreements are terminated because of the lack of compliance of specific franchise owners to keep system standards as stipulated by the franchisor.

For example, a Wendy's franchise owner who decided to sell burgers with cheaper horse meat would soon discover that the franchise relationship can be terminated way before the franchise agreement expired.

If the franchise owner cannot cure an infraction in a timely manner, the agreement can be terminated. Hence, it is fairly easy for a franchisor to find ample reasons sometime in the life of a franchise to terminate a franchise relationship.

State laws vary on what is considered good reason to terminate a franchisee, but generally, franchisors can terminate a franchise for failure to meet sales quotas, lack of quality standards, or not meeting monetary obligations. Some states require notices be given to the franchisee within a certain time frame before termination or non-renewal.

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Franchise FAQs

Submitted by Mr. Blue MauMau on Sat, 2007/12/22 - 09:18.

Any of you legal experts out there want to write a blog or add to this, rather than having yours truly simply reporting on an answer?

I will place the best blog that answers the question "Can a franchise agreement be terminated?" in our existing frequently-asked questions area.

p.s. If any of you have an answer to what you think is a frequently asked question, just click the green "share!" tab (top right corner), and then choose "book page" to contribute an entry. To select what book (section) it should be placed in, choose in the "outline" field, FAQs about franchise - as opposed to Buying Tools, a franchipedia or Blue MauMau FAQ entry (answers about Blue MauMau).

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