Publications

I. Introduction

“Termination” sounds so final: An ending, a period at the end of the sentence, done. As both franchisors and franchisees know (or should know), however, a coda generally follows. Almost any post-termination period involves some housekeeping and mop-up, as well as continuing duties that may last for years. It is easy to lose sight of those necessary tasks and obligations while focusing on the termination itself. Pre-planning is essential, and franchisors should standardize their processes, to the extent possible, to ensure that nothing falls through the cracks in the termination and post-termination process.

Much has been written about disputed termination and wrongful termination claims. Unless otherwise noted, this paper will generally assume that the termination described was an uncontested split. It will discuss common post-termination compliance issues and how to address them, including the goals of transition and sources of transition rights, the nuts and bolts of transition, physical de-identification, destruction and return of proprietary materials, transitioning of phone numbers, use and retention of real property rights, repurchasing items of value, the use of non-competes, and Internet issues. The accompanying Appendix includes helpful resources for developing a standard post-termination compliance plan, including checklists, notice/reminder letters to send to terminated franchisees, and sample franchise agreement language.

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