Once parties get into a franchise agreement, there is commitment from the franchisee to run the franchise for a given period of time. For the franchisee, that time may present many challenges. This is because businesses might never be as profitable as one might have envisioned. When considering franchise termination Illinois business people need to know the terms of the contract and possible risks.
There are important questions that franchisees should ask before getting into any agreement. To begin with, they need to know if it will be possible to run the business for the period agreed. Secondly, there should be a plan of action just in case things do not end up as envisioned. The risks are common for any business enterprises. It is for this reason that you need to have an idea of ways you can have the agreement terminated before end of the agreed term.
Should the franchiser have change of mind before it is late, there is a provision in the franchising code of conduct that allows for a cooling off period. This makes it possible to terminate an agreement within 7 days. The termination can happen either after making the payment or after reaching into an agreement. The period of cooling off is standard but only applies to new franchising agreements. Existing agreements or renewals are not affected. Also, if the refund is to be given, it is without expenses the franchiser may have incurred.
Other than the cooling off period that is enforceable for all franchises, there are many agreements that do not allow the franchisee to end the agreement early, that is, before end of the term. Therefore, it is important to receive legal advice and go through the agreements before they are signed. Although rare, there are agreements that provide franchisees with the option to terminate. Potential franchisees need to consider negotiating with franchisers in case the original agreement does not have that clause.
Another option of negotiation that is available is inserting an exit clause to cater for occurrence of some events. For example, in case premises relocate, or when the expected finances are not approved, you should be able to terminate the agreement. This will come in handy for occurrences that are beyond your control.
In the event that there is no termination option, you will be forced to operate the franchise until the term comes to an end. Nevertheless, it is possible to terminate if it is the franchiser that breeches the agreement. This will however require that you follow dispute resolution procedures laid down by the code of conduct of franchising.
You can also use dispute resolution procedures for requesting for a termination. This can however only be done if there is cause of action against the franchiser to prove they did breech the agreement. However, there is no guarantee that you will achieve termination. It all depends on how strong the case is.
There is the option of mutual agreement. This involves negotiating with the franchiser to have the termination effected. This option involves that you do research to find out what previous franchisers might have done to make it effective.
There are important questions that franchisees should ask before getting into any agreement. To begin with, they need to know if it will be possible to run the business for the period agreed. Secondly, there should be a plan of action just in case things do not end up as envisioned. The risks are common for any business enterprises. It is for this reason that you need to have an idea of ways you can have the agreement terminated before end of the agreed term.
Should the franchiser have change of mind before it is late, there is a provision in the franchising code of conduct that allows for a cooling off period. This makes it possible to terminate an agreement within 7 days. The termination can happen either after making the payment or after reaching into an agreement. The period of cooling off is standard but only applies to new franchising agreements. Existing agreements or renewals are not affected. Also, if the refund is to be given, it is without expenses the franchiser may have incurred.
Other than the cooling off period that is enforceable for all franchises, there are many agreements that do not allow the franchisee to end the agreement early, that is, before end of the term. Therefore, it is important to receive legal advice and go through the agreements before they are signed. Although rare, there are agreements that provide franchisees with the option to terminate. Potential franchisees need to consider negotiating with franchisers in case the original agreement does not have that clause.
Another option of negotiation that is available is inserting an exit clause to cater for occurrence of some events. For example, in case premises relocate, or when the expected finances are not approved, you should be able to terminate the agreement. This will come in handy for occurrences that are beyond your control.
In the event that there is no termination option, you will be forced to operate the franchise until the term comes to an end. Nevertheless, it is possible to terminate if it is the franchiser that breeches the agreement. This will however require that you follow dispute resolution procedures laid down by the code of conduct of franchising.
You can also use dispute resolution procedures for requesting for a termination. This can however only be done if there is cause of action against the franchiser to prove they did breech the agreement. However, there is no guarantee that you will achieve termination. It all depends on how strong the case is.
There is the option of mutual agreement. This involves negotiating with the franchiser to have the termination effected. This option involves that you do research to find out what previous franchisers might have done to make it effective.
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Learn more about the franchise termination Illinois process and get more info about a reputable franchise and dealership litigation firm at http://www.cdcaruso.com/franchise-distribution/terminations today.