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 some questions that franchisees should ask before signing agreements. To begin with, they must know if they are able to effectively run the business for the stated period. Further to that, they need to have a strategy they can use if things are not progressing as planned and they need to opt out. There are many risks that are experienced for any business and thus knowing the possibility of terminating an agreement will be important.
Should there be change of mind before the deal kicks off, a cooling off period contained in the code of conduct can be useful. This makes it possible to terminate the agreement within 7 days. This can happen either after the agreement is reached or after payments are made. The period is standard and applies only to agreements that are new. It will not be applicable for renewals or transfers. There will be a refund but without any incurred expenses.
Besides cooling off period enforceable for franchises, you will find that many agreements do not make it possible to do early termination. This is any termination before the term comes to an end. As such, you need to ask for legal advice and thoroughly read agreements before they are signed. Some agreements. Though rarely, will provide franchisees with a termination option. A potential franchisee should consider having a negotiation with franchisers in the event that the original agreement does not give them that option.
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.
If there is no option to terminate, the agreement requires that you operate the business until the term expires. However, you can still do the termination in case the franchiser breeches the agreement. You will most likely be required to follow appropriate dispute resolution that is prescribed by the franchise agreement or by the franchising code of conduct.
It is possible to use some resolution procedures to ask for agreement termination. That can however only happen when there us cause of action against the franchiser which indicates they did breech an agreement. However, there is no surety that that process will lead to the agreement being terminated. This is because it depends on strength of your case.
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 some questions that franchisees should ask before signing agreements. To begin with, they must know if they are able to effectively run the business for the stated period. Further to that, they need to have a strategy they can use if things are not progressing as planned and they need to opt out. There are many risks that are experienced for any business and thus knowing the possibility of terminating an agreement will be important.
Should there be change of mind before the deal kicks off, a cooling off period contained in the code of conduct can be useful. This makes it possible to terminate the agreement within 7 days. This can happen either after the agreement is reached or after payments are made. The period is standard and applies only to agreements that are new. It will not be applicable for renewals or transfers. There will be a refund but without any incurred expenses.
Besides cooling off period enforceable for franchises, you will find that many agreements do not make it possible to do early termination. This is any termination before the term comes to an end. As such, you need to ask for legal advice and thoroughly read agreements before they are signed. Some agreements. Though rarely, will provide franchisees with a termination option. A potential franchisee should consider having a negotiation with franchisers in the event that the original agreement does not give them that option.
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.
If there is no option to terminate, the agreement requires that you operate the business until the term expires. However, you can still do the termination in case the franchiser breeches the agreement. You will most likely be required to follow appropriate dispute resolution that is prescribed by the franchise agreement or by the franchising code of conduct.
It is possible to use some resolution procedures to ask for agreement termination. That can however only happen when there us cause of action against the franchiser which indicates they did breech an agreement. However, there is no surety that that process will lead to the agreement being terminated. This is because it depends on strength of your case.
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.
About the Author:
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.
No comments:
Post a Comment