Ideally, a franchise agreement will provide a franchisor with income while allowing their product or business to gain greater market penetration. In exchange, a franchisee pays an upfront fee for the rights to use a franchisor’s business model or intellectual property and ongoing royalties and other fees.
However, conflicts can arise over the term of a franchise agreement. This can be the result of a franchisee not following the agreement’s terms, improperly using the franchisor’s intellectual property, or simply not providing the payments as required.
Any of these problems may lead to a franchise agreement’s termination, either early on in the relationship, at the end of the agreement’s time or through a breach of contract lawsuit, which in turn might warrant assistance from a qualified attorney. If necessary, a North Carolina franchise agreement termination lawyer may be able to help you end a franchise agreement.
A franchise agreement places legal burdens on both parties. Through one, a franchisor allows a franchisee to use their business model and their trademarks to open an independent business, while the franchisee provides a fee for that privilege.
It is usually in the best interests of all involved parties to follow the terms of their agreement, and a properly constructed franchise agreement should maximize the chances for a profitable outcome for both parties. However, profit is not a guarantee, so in some cases it may be best for parties to not renew an expiring franchise agreement.
Unfortunately, other decisions to end a franchise relationship are not as amicable or mutually beneficial. Situations may exist where a franchisee does not follow a contractually required procedure. Franchisees may violate franchise contracts by not providing payment, misusing the franchisor’s intellectual property, or by running the business in a way not authorized by the franchisor.
In this kind of scenario, it may be necessary to seek an early end to a franchise agreement. A Charlotte franchise agreement termination attorney could listen to a franchisor’s motivations for terminating an agreement and help them determine how to proceed.
The most common way for a franchise relationship to end is allowing the contract to naturally expire. Every franchise agreement must contain a timeframe for the relationship. After that time, the franchisee must either renew their contract or return the franchisor’s intellectual property and shut down.
The other methods for ending a franchise agreement include a mutual termination by both parties, a transfer or sale of the franchisee’s business, or a lawsuit in court that results in termination. Many franchise agreements contain clauses allowing for termination if the franchisee violates certain provisions, and North Carolina civil courts have jurisdiction to enforce or void these contracts. A franchise agreement termination lawyer in North Carolina could help determine if there are legal grounds for termination and whether it is necessary to file a lawsuit to achieve this goal.
If a franchise has not been profitable or a franchisee has violated the terms of an agreement, it may be necessary to terminate that contract. This can come from the contract’s time coming to an end or through a premature termination with a breach of contract lawsuit.
A qualified attorney in Charlotte could help you take the legal steps necessary in ending a franchisor-franchisee relationship. Contact a North Carolina franchise agreement termination lawyer today to protect the future of your business.