The innocent party should allow the defaulting party a reasonable period of time to remedy the infringement, failing which the innocent party would have the right to terminate the franchise agreement. A minor infringement that does not go to the origin of the agreement is simply a breach of a condition and the appropriate remedy is compensation. The franchise agreement includes franchise rights such as territory, duration, minimum performance, franchise services, fees and payments, training offered, intellectual property rights, use of intellectual property and other rights and obligations of the franchisee. In addition, there is usually an operations manual provided by the franchisee, which may or may not be included in the franchise agreement. Because of the difficulties encountered in re-establishing a franchisee`s fundamental offense, franchisees often turn to the law of misrepresentation to see if this can offer a way out. With respect to franchising, misrepresentation is usually related to the fact that the financial forecasts for the franchise are clearly false or reckless by the franchisee. The misrepresentation must have prompted the franchisee to enter into the contract. One option would be to exercise your right to sell the franchise as part of the agreement. However, finding a buyer is often problematic, especially when the store is still in its infancy. You may feel that business did not work out due to some mistakes by the franchisor.

Perhaps the franchisee did not provide adequate training or support. The problem faced by franchisees is that franchise agreements are designed in favor of the franchisee and, in most cases, do not contain an explicit contractual right for a franchisee to terminate the contract due to the franchisee`s material infringement. In addition, a franchisee`s contractual obligations in the contract are often vague, so it is not always easy for a franchisee to be able to point out clear contractual obligations against which the franchisee is breaching. If the initial franchise is successful, the franchisee may apply for the right to open and operate multiple franchise premises. Many franchise agreements contain clauses that attempt to exclude a franchisee`s liability for misrepresentation. However, these clauses must be an assessment of adequacy in order to be implemented. In the most recent case of Ali v Abbeyfield VE Ltd (2018), the Vision Express franchise agreement contained a clause excluding any liability for pre-contractual statements, with the exception of those appended to the contract in writing or fraudulent pre-contractual statements. The clause was found inappropriate by the Court because: the parties may list other events of termination of the franchise agreement, for example in the event of a substantial change in the management, ownership or control of the franchisee, when one of the parties becomes insolvent or if a cooling-off period is granted to the franchisee, a change of attitude for no reason. For more information on terminating a contract, see below….