"Good Cause" Termination of a Franchise (Part B)

Failure to Meet Sales and Other Requirements

Another good cause for the termination of a franchise is the failure to meet performance standards.

In fact, franchises have been terminated for the failure to meet performance standards when:

• a dealer failed to meet reasonable sales goals;
• a dealer became insolvent;
• a dealer became unprofitable;
• a franchisee failed to sell in its entire territory, as required under the franchise agreement; and
• a franchisee intentionally underpaid its royalties.

If you have sold a franchise in New York, and you need to know whether a failure to meet performance standards may allow the termination of a franchise, then you can have a New York franchise lawyer review your franchise relationship. If termination is possible, then you will have to follow procedural requirements to terminate the franchise.

Procedural Requirements for the Termination of a Franchise in New York

If it is determined that a franchisor has good cause for the termination of a franchise, then the franchisor must comply with the procedural requirements for termination.

These procedural requirements include:

• giving an advance written notice of the termination in the required amount of time;
• including in the notice all of the reasons for termination;
• including in the notice how much time the franchisee has to cure the default; and
• continuing to comply with the franchisor's obligations throughout the notification period.

Those procedural requirements will depend on the state in which the franchise agreement was made. Different states will have different time requirements for the notice of termination, as well as the minimum periods to cure the default. To understand the procedural requirements for the termination of a franchise in New York, you should speak to a New York franchise lawyer who has experience in the proper procedures for ending a franchise relationship.

Contacting a New York Franchise Lawyer

If you are an entrepreneur who is interested in franchising your business there is a lot you need to know, including the significance of evaluating your trademark and how to approach the preparation of your FDD. For a limited time, get New York franchise lawyer Charles N. Internicola, Esq's franchise law report to determine whether or not your business is right for franchising.

Contact us today at 800-976-4904 for more information about Mr. Internicola's franchise law services in New York and how he assists entrepreneurs franchise their business nationwide.

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