You can end the franchise agreement early or terminate a franchise agreement in a number of circumstances.
Breach by franchisee
You can terminate a franchise agreement if the franchisee has not followed the franchise agreement (called a “breach” of the franchise agreement) and does not start to follow the franchise agreement when requested, or do what you request that the franchisee do to fix (called “remedy”) the breach. In this circumstance you must provide the franchisee with the following: specific details of the breach and how it can be remedied, reasonable time to remedy the breach (normally 30 days), reasonable notice that you intend to terminate the franchise agreement if the breach is not remedied. If the franchisee does not remedy the breach within the time frame allowed (normally 30 days) you can then terminate the franchise agreement by notice.
No breach by franchisee
A franchise agreement usually contains terms which allow you in certain circumstances to terminate the franchise agreement without a breach by the franchisee. The types of things covered by this are if the franchisee does not satisfactorily complete training within a certain period, if the franchisee is required to enter a lease and the franchisee has not done so within a certain period, if the franchisee is required to fit out a retail premises and the franchisee has not done so within a certain period , if the franchisee has not obtained the required insurances or licenses to operate within a certain period. You must give the franchisee reasonable notice of the termination and the reasons for it. What is reasonable notice will depend on the circumstances.
Special Circumstances
The Franchising Code of Conduct sets out specific circumstances in which you are not required to provide the franchisee with reasonable notice before terminating the franchise agreement. You may immediately terminate the franchise agreement for any of the following reasons: the franchisee no longer holds a licence or lease that is required to maintain the franchise business, the franchisee become bankrupt or insolvent, the franchisee voluntarily abandons the franchise agreement or business, the franchisee is convicted with a serious offence, the franchisee operates the business in a manner which endangers public health and safety, the franchisee is fraudulent in connection with the operation of the franchise business.
