Under What Conditions Can The Franchisor And/Or The Franchisee Terminate The Franchise Agreement?
2007-03-07 12:30:08 · 4 answers · asked by Kick_Fanatic_Jordan_Radic 2 in Business & Finance ➔ Corporations
Is there any website that i could find the answer to my question since it's not on its original websit?
2007-03-07 12:45:17 · update #1
Usually the Franchiser terminates the agreement when the Franchisee is not running the business correctly. Under the agreement, especially in the food business, the franchisee must buy all food products from Corporate. When we had our Dunkin' Donuts business, an owner of another Dunkin' Donuts would buy all his donut mixes from a warehouse because the prices were a lot cheaper. The Franchiser ended up stripping him of his license. Another owner was stealing money. With many franchise agreements, the franchisee has to remit a portion of their sales to the franchiser. This owner purposely lowered his sales so he could pay less in franchise fees. Dunkin' Donuts ended up stripping this person of his license to operate a Dunkin' Donuts also. Another owner was threatened because he did not keep his store clean and it made Dunkin' Donuts look bad. He ended up obeying.
The franchisee can end the agreement anytime by selling his/her business to someone else.
2007-03-07 23:59:53 · answer #1 · answered by potatochip 7 · 0⤊ 0⤋
Joe S. is right that you must read your Franchise Agreement to know for sure. However, the franchisor can usually terminate the franchisee for"not operating the franchise properly"; i.e., if they want to get rid of you, they can easily find a way.
For the franchisee, terminating is much more difficult. It's usually only possible through transference of ownership, bankruptcy, death or the end of the franchise term. None of which are attractive.
The most illuminating text on franchise contracts I've ever seen is by Paul Steinberg and Gerald Lescatre and is called "Beguiling Heresy: Regulating The Franchise Relationship", published in the Penn State Law Review, Volume 109, 2004. If you want real world examples of how rigid and one-sided these contracts can be, you'll find no better source.
Good luck!
2007-03-08 01:49:23 · answer #2 · answered by fanofmawson 3 · 0⤊ 0⤋
You would have to read the UFOC of the particular franchise to find out.
2007-03-07 20:42:48 · answer #3 · answered by joe s 6 · 0⤊ 0⤋
provisions should be listed in the agreement
2007-03-08 04:01:09 · answer #4 · answered by BATMAN 4 · 0⤊ 0⤋