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PLAYBOOK TEMPLATES

Franchise Agreement

A Franchise Agreement defines the relationship between a franchisor and franchisee, setting the terms for brand use, operations, and ongoing support. This playbook outlines key negotiation strategies, performance obligations, and critical clauses to protect both parties’ long-term interests.

Termination Rights

Why This Matters: Robust termination clauses provide a safe exit strategy, limit post-termination liabilities, and ensure an orderly disengagement. They reduce the risk of lock-in and unexpected ongoing commitments.

Negotiation strategy

If you're the Franchisor:

Ensure the termination clause includes both 'for cause' and 'for convenience' options, with clear notice and cure periods. This provides flexibility and protection against unforeseen circumstances.

If you're the Franchisee:

Negotiate for longer notice periods and reasonable cure periods to allow time to address any issues before termination. This can help maintain the business relationship and avoid abrupt contract end.

Essential elements

1

Notice Period

Timeframe for termination notice.
2

Cure Period

Time to remedy contract breaches.
3

Post-Termination Obligations

Duties after contract ends.

Action framework

ACCEPT

Propose edits if notice or cure periods are too short or undefined.

EDIT

Reject if the clause lacks termination for cause or convenience.

ADD

Add language for post-termination obligations if missing.

PRO TIP

Always ensure the termination clause aligns with industry-specific regulations to avoid compliance issues.

Example clauses

FAVORABLE

Comprehensive Termination Clause

"The agreement may be terminated by either party for cause or convenience, with a 30-day notice period and a 15-day cure period."
NEUTRAL

Basic Termination Clause

"Either party may terminate the agreement with a 30-day notice."
UNFAVORABLE

One-Sided Termination Clause

"The Contractor may terminate the agreement at any time without notice."

Fallbacks

High-Risk Projects

In high-risk projects, ensure the termination clause includes detailed transition support and wind-down procedures to mitigate risks.

Regulated Industries

For contracts in regulated industries, include specific compliance requirements in the termination clause to adhere to industry standards.

Long-Term Contracts

In long-term contracts, consider including periodic review clauses to reassess termination terms and ensure they remain relevant.
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