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.
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.
FEATURED SOLUTIONS
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WEEK 1
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Our CX team works with you to understand your contracting challenges, prioritize key workflows, and identify the biggest impact areas. We build a tailored implementation plan that fits your needs.
WEEK 2
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WEEK 3
Deliver & Test
Your team builds initial playbooks, reviews existing clause libraries, and trains the DocJuris agent to align with your internal standards and negotiation positions.
WEEK 4
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