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The Franchisor and the Perpetual Agreement Issue
The perpetual agreement issue is often troublesome to franchisors, especially when the franchise agreement contains no contractual language to establish non-renewal. This is because a franchise business can be affected by adverse market conditions over time and a franchisor may need to adjust their methods of distribution. The perpetual agreement issue may prevent the implementation of such adjustments.
Franchisors and suppliers alike object to the perpetual agreement issue, claiming that it is an intrusion upon their right to contract freely. Furthermore, the issue affects a franchisor's ability to implement quality control. This is because the threat of termination or non-renewal is the primary method that a franchisor uses to police and protect their trademarks.
If a franchise falls below standards and the franchisor cannot threaten a franchisee with termination or non-renewal, the sub-standard franchise may continue to reduce the value of the franchisor's trademark.
Termination of a sub-standard franchise benefits other franchisees by preserving the goodwill of the franchise system. Furthermore, such termination also benefits consumers by ensuring that they receive a high quality of products and services. Meanwhile, the perpetual agreement issue places the burden of proof on the franchisor to show that there is good cause for termination. This makes termination more difficult, even when good cause exists.
How a New York Franchise Lawyer Can Help
If you have found good cause for the termination of a franchise, you may seek judicial relief in order to have that franchise terminated. To do so, you will have to show good cause in court. In court, your New York franchise lawyer can represent your legal interests and do their best to help you terminate a franchise in New York, using their knowledge of the state's most up-to-date business regulations and laws.
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 1-800-976-4904 for more information about Mr. Internicola's franchise law services in New York and how he assists entrepreneurs franchise their business nationwide.
