Termination Alternatives in Tough Economic Times

May 16, 2010 Published Work
International Franchise Association 43rd Annual Legal Symposium

I. Introduction
Too often, when a franchisee defaults on its franchise agreement obligations, the franchisors' knee-jerk reaction is immediately to begin the termination process. This paper challenges franchisors to take a step back, analyze more fully the pros and cons of a particular termination decision for themselves and for their systems, and consider altneratives that may more effectively advance their long- or short-term interests. Section II of this paper outlines some of the possible benefits of avoiding termination, Section III explains how termination, when necessary, is accomplished and enforced, Section IV describes some of the dangers and pitfalls, and Section V discusses the impact on and possible involvement of franchisee associations.

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