Legal Question in Business Law in California

Can I terminate a franchise agreement if I have changed my mind and not moved forward with opening up a shop? The agreement states that the 20 year term commences the day the shop opens up for business. At this stage I haven't found a space, or attended any trainings at the franchisor offices. After attending a conference held by the franchisor, I determined it was not a fit for me. Will any non-compete covenents apply if the agreement is terminated, even if I haven't completed any trainings? I have already paid a franchise fee and understand that will not be refunded to me.


Asked on 5/20/14, 9:40 am

1 Answer from Attorneys
Edward Hoffman Law Offices of Edward A. Hoffman

Technically, you can always "terminate" a contract. What matters is whether you will breach it by doing so, and what consequences you will face as a result. Terminating your contract at this point probably would be a breach, but that depends on what the contract says. Even if it is a breach, the consequences of breaching it might be minor. It is also possible that the franchisor will agree to release you even if it doesn't have to.

You should consult with a lawyer asap, before you decide what to do or take any further action.

Good luck.

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Answered on 5/20/14, 12:29 pm


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