Most franchise disputes trace back to a handful of clauses buried in a lengthy agreement. Franchisees frequently sign these documents without fully appreciating how a single provision on termination, territory, or transfer can shape years of the business relationship that follows.
At August Law, our franchise law attorneys serve clients throughout Florida. Regardless of which state we’re in, we see the same key franchise clauses pop up in disputes again and again. Our goal is to walk clients through their franchise agreements so they fully understand their rights and commitments, and to help resolve any disputes.
Territory and Exclusivity Provisions
Territory clauses define where a franchisee can operate and whether the franchisor can place additional units nearby or sell through other channels, such as online platforms or big-box retailers. Disputes arise when a franchisor authorizes a competing location just outside a franchisee’s protected radius, or when the agreement never granted real exclusivity in the first place. Because territory language varies widely across systems, our attorneys pay close attention to how these provisions are worded rather than assuming a franchisee has protection they may not have.
Termination and Non-Renewal Clauses
Termination clauses set out the grounds and process a franchisor must follow to end the relationship, including notice periods and any opportunity to cure a default. In Michigan, the Michigan Franchise Investment Law (MCL § 445.1527) limits a franchisor’s ability to terminate without good cause or to decline renewal without offering fair compensation or comparable terms.
Florida has no parallel statute, so the agreement’s termination language carries more weight for Florida franchisees. In both states, franchisors that skip required notice or cure periods can expose themselves to liability, while franchisees who ignore a cure deadline can lose rights they otherwise would have had.
Arbitration and Forum-Selection Clauses
Many franchise agreements require disputes to be resolved through arbitration and specify where it must occur, often in the franchisor’s home state. For example, Michigan law prohibits a franchisor from requiring arbitration or litigation outside Michigan (MCL § 445.1527(f)), which can override an out-of-state forum clause for a Michigan franchisee. Florida franchisees generally lack that statutory backstop, so courts analyze the enforceability of a forum-selection or arbitration clause under general contract principles, including the Florida Arbitration Code (F.S. Ch. 682).
Transfer and Assignment Restrictions
Franchise agreements typically restrict a franchisee’s ability to sell the business, bring on new owners, or assign the agreement without franchisor approval. Disputes often surface when a franchisor withholds consent, imposes new conditions on the incoming buyer, or exercises a right of first refusal in a way the franchisee did not expect. Reviewing these provisions before attempting a sale can prevent a transaction from collapsing at the last stage.
Minimum Performance and Supplier Requirements
Clauses requiring minimum sales volumes, mandatory purchases from designated suppliers, or specific operational standards often create friction, especially when market conditions change after signing. Franchisees sometimes argue that these requirements were not clearly disclosed or were applied unevenly across the system. At the same time, franchisors point to the agreement’s plain language to justify enforcement action, including termination.
Reviewing Your Agreement Before a Dispute Escalates
Because these clauses interact with one another, and because states like Florida treat some of them very differently, a provision that looks routine on its face can carry significant consequences once a disagreement begins.
If you are reviewing a franchise agreement or already facing a dispute in Florida, August Law can help you understand what these clauses mean for your situation. We also represent businesses in Michigan. Contact us online to schedule a consultation today.