Franchise Termination

Franchise termination is the legal end of the franchise relationship before the agreement's natural expiration. Terminations can be initiated by either party but are most commonly initiated by the franchisor for cause, such as non-payment of royalties, failure to meet operational standards, bankruptcy, or violation of the franchise agreement. The franchisor typically must provide written notice and a cure period (often 30 days) for the franchisee to remedy the breach. In cases of incurable breaches (such as fraud or abandonment), immediate termination may be permitted. Upon termination, the franchisee must cease using all trademarks, return proprietary materials, and may be subject to a non-compete clause. Wrongful termination disputes are among the most litigated issues in franchise law.