A termination notice from your franchisor can threaten the business you built, future income, and your ability to operate a similar business. August Law, PLLC handles franchise disputes involving Florida businesses, including disputes over defaults, termination rights, restrictive covenants, and post-termination obligations.
Whether a termination is enforceable usually starts with the franchise agreement and any Florida statute that applies to the specific industry.
The Franchise Agreement Usually Controls the Termination Process
Item 17 of the FDD summarizes renewal, termination, transfer, and dispute-resolution terms. Florida does not have one general franchise statute requiring good cause for every franchise relationship. Certain industries, including motor vehicle dealerships and beer distribution, have separate statutory protections.
For a typical business-format franchise, the agreement often identifies the defaults that can support termination and the notice procedures the franchisor must follow.
Default Notices and Contractual Cure Periods
A default notice should be compared with the agreement immediately. Many agreements provide a cure period for specified defaults, but its length and availability depend on the contract and the type of breach. Some serious defaults can permit faster termination.
Document when the notice arrived, what it claims went wrong, and every step taken to correct the problem. That record can become important if the parties later disagree about whether the default was cured.
Challenging a Wrongful Franchise Termination in Florida
A franchisee can challenge a termination when the franchisor fails to follow the contract, relies on a default that did not occur, or violates another applicable legal duty. Florida contract law recognizes an implied duty of good faith and fair dealing, but that duty does not rewrite the agreement’s express terms.
A separate sales-stage claim can also matter. Florida Statute § 817.416 prohibits specified intentional misrepresentations when selling or establishing a franchise, including misstatements about the chances of success, required total investment, or market oversaturation.
Post-Termination Costs and Restrictions
Termination can trigger obligations that continue after the franchise relationship ends. Review provisions involving:
- Liquidated damages or future royalty claims
- Post-term non-compete restrictions
- Trademark and branding removal
- Confidential information and trade secrets
- Return of manuals, equipment, or other franchisor property
Florida Statute § 542.335 governs many restrictive covenants. For a former franchisee, a restraint of one year or less is presumed reasonable in time, while a restraint of more than three years is presumed unreasonable. The agreement and the legitimate business interest asserted still matter.
Have August Law Review Your Florida Termination Notice
Do not assume a default notice ends the franchise immediately. The agreement, the alleged breach, the cure language, and the post-termination provisions should be reviewed together before you respond.
Call August Law at 248-833-6225 or contact us online to discuss a Florida franchise termination dispute.