Termination of franchise agreement

Termination of franchise agreement

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This is a document termination of franchise agreement for use in a franchising matter.

A franchise agreement is a contract between the franchisor and the franchisee. Under that agreement, they are bound for a specified term. Termination of franchise agreements is governed by the Franchising Code of Conduct (Code), which provides circumstances in which the franchise agreement can be terminated:

  1. immediately under clause 28 of the Code; and
  2. after a compliant notice of breach is provided and not remedied under clause 27 of the Code.

However, practitioners should note that under clause 29(2) of the Code, a franchisor may terminate the franchise agreement without needing to comply with clauses 27 and 28 of the Code. That may occur if, at the time of termination, the franchisor and the franchisee mutually agree to terminate the franchise agreement.

This precedent should only be used for termination in accordance with clause 29(2) of the Code.  

This document has been authored for LexisNexis by Stephen Giles, Norton Rose Fulbright Australia with introductory notes by Jane Garber-Rosenzweig, Gable Lawyers.

This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.