The franchise business will contact you by means of email and/ or telephone only to the email address and phone number you have provided.
By submitting the enquiry form you are consenting to send your personal information to the selected franchise business.
You also agree to receive further newsletter email marketing from What Franchise.
Why would a franchisor decide not to renew a franchisee’s franchise agreement?
Shelley Nadler writes:
It’s usually the practice for franchisors to grant a franchisee the right to renew their agreement at the end of the initial term. However, there are conditions attached.
It’s usual for renewal of the franchise agreement to be subject to the franchisee’s compliance with the terms of the agreement during the initial term. If a franchisee has been served with notices of breach of the franchise agreement by the franchisor, the franchisor may decide not to renew, even if these breaches were remedied.
A condition of renewal may also be a requirement for the franchisee to make significant improvements to their business to bring it up to the standard to which a new franchisee would adhere. There may be a requirement for retraining or the purchase of the latest technology. If a franchisee does not comply with these requirements, a franchisor may decide not to renew the franchise agreement.
There is usually a requirement that the franchisee gives notice to the franchisor that they wish to renew within a certain period prior to the expiry of the initial term. If the franchisee doesn’t do this, the franchisor could decide not to renew the franchise agreement, particularly if the legal term ‘time is of the essence’ is used, which means that if the notice is not provided strictly within the time period set, the right to renew can be lost, even if there is only a slight delay of one or two days.
Shelley Nadler is a legal director in Bird & Bird’s international franchising team and has many years’ experience of advising on all aspects of franchising.
You might also be interested in
Will a franchisor ensure I operate my business within the required health and safety guidelines of the sector I operate in?
Answered by Shelley Nadler
Shelley Nadler writes: The franchisor should provide health and safety guidelines appropriate to the sector the franchise... read more
Answered by Louise Harris
Louise Harris writes: The initial investment in a franchise varies greatly across the industry, but it’s one... read more
Answered by John Pratt
John Pratt writes: As with all franchises, you have to ask yourself: Is this the sort of... read more
Answered by Alan Wilkinson
Alan Wilkinson writes: One of the attractions of franchising is the resilience it shows through hard times... read more
Exciting Franchise Opportunities
Companies to Consider
Homecare by Kare Plus
35% to 40% profit, depending on the business model
£50,000 – £100,000 profit
Third party sources
Potential ROI within 18 months with an average net profit of 21%
Fresh Car Valeting
Yes, by a third party
Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
Added 2 years ago | 2 min read
Added one hour ago | 2 min read
Added one day ago | 2 min read
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
What Franchise Newsletter
Keep up to date with all the industry news