Sample Letter For Termination Of Franchise Agreement

If the other party refuses to accept the termination after seriously violating the franchise agreement or the law, you may threaten to file a complaint and attempt to negotiate a settlement agreement. This should put you in a good negotiating position. Important note: If your franchise agreement is terminated by mutual agreement with your franchisor, the franchisee must continue to take into account its obligations to its lessor arising from its lease agreement. Read your franchise agreement carefully. The agreement should specify the circumstances in which either party may terminate it. Negotiations for a limitation of trade rules. This provision prevents the franchisee from using the franchisee`s trade secrets and business methods after the end of the franchise. You will also be prohibited from engaging in a similar activity elsewhere if it looks and feels the same and can be associated with the original franchise. This is completely understandable, but your lawyer should be mindful of anything inappropriate that can negatively impact your future if you want to stop franchising and pursue a similar activity. Determine if the franchisee has violated the essential terms of the franchise agreement.

If you can report a serious breach of the agreement, for example. B a lack of support or failure to provide the right deliveries on time, you will have a better case if you try to terminate the original contract. It is therefore imperative that the franchisee have the contract verified by an experienced franchise lawyer to ensure that the provisions contained therein also offer protection to the franchisee in the event of termination of a franchise. Design a dissolution provision that states that the franchise will be terminated from the effective date of the franchise termination agreement. All rights granted to the franchisee are returned to the franchisor and the original franchise agreement is terminated. Our sitemap for free legal forms contains a comprehensive list of additional franchise information. If the business is not resold, the franchisee should benefit from the franchisee`s help to recover as much as possible his capital investment (construction of stores, signage, stock, etc.). Ask an experienced franchise lawyer to review the draft contract. While it will cost you a little money, it will cost you much less than if a lawyer rewrites it from substance to time, and much less than the possible consequences of a poorly worded franchise termination agreement.

Negotiation of a provision for the use of competition. This prevents the franchisee from carrying out a competing activity in a given geographical area and for a specified period. The laws of most states limit the scope of these provisions (e.g. B a maximum duration of 3 years within a radius of 100 miles). Are you considering terminating your franchise agreement? First, check your country`s franchise law and your original franchise agreement to find appropriate grounds for termination. Typical reasons are a “cooling-off period” after signing the initial franchise agreement, a case of force majeure and the death of the franchisee. If any of these statements are accurate, you may not need to consult the other party`s agreement. Otherwise, you should arrange for the sale of the franchise to a third party instead of terminating the franchise agreement….