Franchise Agreement Renewal Lawyer

Most franchise agreements run for a fixed term, often five to ten years, and give the franchisee a right to renew if certain conditions are met. Renewal is rarely automatic, and it is rarely a simple extension of the deal you signed. In most systems, renewing means signing the franchisor’s then-current form of franchise agreement, which may look very different from your original one.

A franchise agreement renewal lawyer from Franchise.Law can review the renewal terms before you commit to another term, explain what has changed, and help you negotiate where there is room to do so. We represent franchise owners across the United States, and because much of our practice involves drafting franchise agreements for franchisors, we know where these documents tend to shift in the franchisor’s favor.

What Should Franchisees Review Before Renewing?

Your original franchise agreement sets the conditions for renewal, and the franchisor will expect each one to be satisfied. Well before your renewal deadline, you should review:

• The notice window for exercising your renewal right, which often closes six to twelve months before your term expires
• Renewal conditions such as being in good standing, paying a renewal fee, and remodeling or upgrading your location to current standards
• Changes in the then-current franchise agreement, such as higher royalties or marketing fees, new technology fees, a smaller protected territory, or stricter post-term restrictions
• The general release most franchisors require at renewal, which can waive claims you may have against the franchisor
• Whether the franchisor must give you its current Franchise Disclosure Document (FDD), which is generally required when the new agreement differs materially from your original one

Renewal is a business decision as much as a legal one. An experienced franchise renewal lawyer can give you an objective read on what the new terms will cost you over the next term, so you can decide whether to renew, negotiate, or plan your exit.

What Happens if Your Franchise Agreement Is Not Renewed?

Some franchisors decline to renew, and some franchisees decide the new terms are not worth it. Several states, including California, Illinois, Washington, and Wisconsin, have relationship laws that limit a franchisor’s ability to refuse renewal, require advance notice, or restrict enforcement of a non-compete after a non-renewal. Your franchise renewal lawyer can tell you whether any of those protections apply to you.

If your franchise agreement expires without renewal, you will need to address:

• De-identification, including removing signage, branded materials, and the franchisor’s trademarks
• Transfer of phone numbers, websites, social media accounts, and customer data
• Your real estate lease, and any right the franchisor has to take an assignment of it
• Any option the franchisor has to purchase your business assets, and how the price is set
• Final payments owed to the franchisor, and any release the franchisor asks you to sign
• Post-term non-compete and non-solicitation covenants, and how they affect your next business

It is wise to start this review with a franchise attorney several months before your renewal notice deadline.

Contact a Franchise Agreement Renewal Attorney From Franchise.Law

If your franchise agreement is coming up for renewal, contact Franchise.Law before you sign anything. An experienced franchise agreement renewal lawyer can review your renewal rights, the new franchise agreement, and the release, identify the terms worth negotiating, and help you prepare for the next term of your business.