How To Exit A Franchise Agreement

If you have decided to terminate the franchise agreement before it ends, speak to a business lawyer familiar with Franchising. Before you try to terminate, ask your lawyer: franchise agreements in general describe differently what happens when the agreement ends. Franchisees generally refrain from using the franchisor`s trademarks and intellectual property and will be subject to trade restrictions. Although not always announced by the franchisor, you can terminate the contract if you and the franchisor negotiate to terminate the franchise agreement on reciprocal terms. For potential franchisees, this is an area in which you can perform other due diligence. For example, they may turn to former franchisees who have terminated the franchise agreement and ask them for the circumstances of the termination. A certain degree of risk and commitment is associated with the conclusion of a franchise agreement. You should consider your termination options when deciding whether to buy. If you need assistance in verifying, negotiating or developing a franchise agreement, contact our franchise lawyers at 1300 544 755.

Different states across the country have franchise laws that limit certain franchise activities and offer franchisees different remedies for franchise violations of their franchised legislators. For example, if your franchisor has violated a state franchise law by selling you a franchise without providing you with a specific franchise publication document (FDD) in a timely manner, you may be entitled to request the withdrawal of your franchise agreement. The code also allows franchisors to terminate a franchise agreement if the franchisee has not committed any violation. This only applies if the treaty contains this explicit right. Although unusual, some franchise agreements offer the franchisee a termination option. A potential franchisee should consider negotiating a termination option with the franchisor if the original franchise agreement does not contain any. Franchise agreements generally do not allow a franchisee to terminate the franchise agreement.

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