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How do you end a franchise contract but not the business?

On Behalf of | Jun 8, 2022 | Franchise Law |

Starting a franchise is a complex process. You need to have the financial resources and business experience necessary to meet the criteria established by the company. You will likely have to undergo training, make a substantial financial investment and continually maintain your business according to the standards established by the company. 

Eventually, you may realize that you would have a profitable business operation even without the franchise aspect. That is when you will realize that ending a franchise can be just as difficult as starting one. 

Can you cancel or end a franchise once you have already signed a contract? 

Your contract probably includes cancellation rules

Although you may not have looked at it closely when you first signed the contract, there is likely a clause specifically discussing what happens when you want to cancel the franchise agreement. There may be a specific timeline or a fee involved. Often, the company will have rules intended to protect its intellectual property included in the franchise agreements. 

You may need to significantly change your business’s appearance and operations if you want to remain in the same industry after canceling your franchise. However, with the review of your contract and proper planning, you may be able to end your franchise agreement and the associated costs associated without closing the entire business. 

The more that you have invested in the business itself and the less impact the company has had on your business’s success, the easier it may be for you to terminate your franchise agreement. Learning more about your rights as a franchise owner or operator can help you make the best choices for your business.

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