Hotline: 1800 102 2007
Hotline: 1800 102 2007
Search Business Opportunities
franchising aspects 2009-09-29

Fueling factors to terminate franchise agreement

Franchising no doubt is a successful formula for the expansion of a proven business. However, there are instances of termination of a franchise agreement. Let us find out

By Chief Sub Editor
Fueling factors to terminate franchise agreement

Franchisee pays royalties to the franchisor, expands his business, provides assistance in maximising growth and profits, and promotes his brand name. Still there are a numbers of occasions when the franchisees are terminated. Now the questions that arise are: Why franchise agreements are terminated? What are the causes responsible for this termination and what are the consequences? The most significant cause that leads to the termination is a non performing franchisee, or those that fail to come up to franchisors’ expectations in terms of profits and growth. Though the termination of the franchise agreements may differ from franchise to franchise but there are certain common causes responsible for these terminations. The article tries to figure out the most prominent situations that lead to termination of the franchise agreement.

Bankruptcy: Franchise agreement can be terminated if the franchisee or the franchise is declared bankrupt or declared to be insolvent by the judiciary.

Failure of franchisee: In case the franchisee fails to operate the franchised business for some days.

Wrong acquisition report: If the franchisor comes to know about material misrepresentation made by the franchisee in terms of profit generated by the franchised outlet.

Misconduct: In case the franchisee is found guilty for an offense, or has committed any criminal misconduct relevant to the operation of the franchise, that franchisor believes will have an adverse effect on the franchise system.

Noncompliance: In case the franchisor cured any default noticed by him in the franchisee but he engages in the same noncompliance, the franchise agreement can be terminated.

Change of contact detail: Franchise agreement can be terminated in case the franchisee does not inform franchisor about the change or discontinuance of use contact details with in some specified time. Failure to pay to the franchisor: In case the franchisee fails to pay any fee or other charges to the franchisor with in a specified time.

So, the article aims at alarming the franchisees to consider the above mentioned terms and conditions. If you found yourself not following this then wake up and start following these in order to keep your franchise agreement safe and successful.

Comment
image
image
image
image
Related opportunities
  • Ice creams & Yogurt Parlors
    About Thanco's Natural ice cream :-Though many things have changed from..
    Locations looking for expansion Karnataka
    Establishment year 2006
    Franchising Launch Date 2016
    Investment size Rs. 10lac - 20lac
    Space required 100 - 1000 Sq.ft
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Bangalore Urban District Karnataka
  • Quick Service Restaurants
    About Us: Conceptualized in Malaysia, Papparoti specializes in a unique mouthwatering..
    Locations looking for expansion Delhi
    Establishment year 2013
    Franchising Launch Date 2013
    Investment size Rs. 30lac - 50lac
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
  • Quick Service Restaurants
    About Us: • Chawlas2 is one of the biggest North Indian..
    Locations looking for expansion Punjab
    Establishment year 1960
    Franchising Launch Date 1991
    Investment size Rs. 10lac - 20lac
    Space required 400
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Ludhiana Punjab
  • Extra Curriculum Activities
    About Us: ScienceUtsav is an edutainment program for children of age..
    Locations looking for expansion Maharashtra
    Establishment year 2010
    Franchising Launch Date 2016
    Investment size Rs. 50 K - 2lac
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Mumbai Maharashtra
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories

Free Advice - Ask Our Experts