What are the grounds for terminating a franchise agreement in Texas?

On Behalf of | Aug 18, 2020 | Franchise Law

Many Dallas area residents have dreamed of owning their business. Owning a franchise can be a way for a person to have their own business that is already established. A franchise offers many advantages for a business owner, including support from the franchise company, a known brand, and consistency. But what happens if a franchisee wants to get out of a franchise agreement?

A franchise agreement is typically an agreement between the franchise and the franchisee. Some agreements can be complex, and it is important for a franchisee to pay attention to the termination clause of the agreement. Without a breach of contract most franchise agreements end at the expiration of the contract or if a franchisee does not renew the franchise option. Typically, a franchisee can terminate a franchise contract when a material breach has occurred and has not been resolved in a timely manner. Examples of a breach of contract may include:

  • Failure to provide training and support as listed in the contract
  • Franchisor goes bankrupt
  • Franchisor commits fraud
  • Franchisor fails to protect franchisee territory

If a franchisee has questions or concerns regarding their franchise contract, they may want to speak with an attorney who specializes in business law. An attorney can help review the franchise contract and help their client understand the grounds in which a termination can occur. An attorney can help their client terminate their franchise contract and close the franchise. They can ensure the franchise termination is legal and is financially safe. Terminating a franchise agreement can be a complex process so having a legal professional who has experience with these matters is important.