Key franchisee rights

Click to find out which states have each protection.
Termination only with good cause
Franchisor cannot terminate your franchise agreement without an adequate reason. The definition of “good cause” varies by state.

Notice for termination
Franchisor must generally give written notice before terminating your franchise agreement.

At least 30-day cure period for termination
Franchisor has to give you at least 30 days to correct any documented problems before terminating your franchise agreement.

Compensation for termination
Some provision for compensation if franchisor terminates your franchise agreement. Compensation provisions vary significantly, and some are very limited.

Nonrenewal only with good cause
Franchisor cannot refuse to renew your franchise agreement without an adequate reason. The definition of “good cause” varies by state.

Notice for nonrenewal
Franchisor must generally provide notice before refusing to renew your agreement.

Compensation for nonrenewal
Some provision for compensation if franchisor refuses to renew your franchise agreement. Compensation provisions vary significantly, and some are very limited.

Encroachment protections
Some protections against franchisor opening competing units near your franchise.

Freedom of association protections
Franchisor cannot prevent you and fellow franchisees from forming independent franchisee associations or retaliate against you for joining an association.

Franchise inheritance protections
Some protections of your ability to pass on your franchise to your spouse or heirs.

Transfer/sale protections
Some protections of your ability to sell or transfer your franchise.

 

This is not legal advice. Franchise law is complicated, and this list of selected provisions cannot capture all the fine points. This list covers only certain provisions regulating the franchisee-franchisor relationship after franchisees invest in a franchise. It does not cover any provisions of pre-investment disclosure laws. Consult a lawyer before signing a franchise agreement or if you are in a dispute with your franchisor.