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Franchising/Mr. Franchise on terminating a franchise agreement


I am a 16 year franchisee and have not signed a renewal contract in 3 years.  I would like to terminate the agreement and change my business name.  My franchise fees are payable by a percentage of my weekly sales.   I've had my sales reps tell me to just change my name and open a new account.

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Going to your question, following your sales reps advice will likely get you embroiled in a costly lawsuit with the franchisor. Your sales reps are obviously not franchise attorneys, nor is their advice sound.

The thing to realize about franchise relationships and franchise contacts is this - it's very easy to get in and very difficult to get out. Franchise companies deliberately plan for those who attempt to break away and not renew; they may be a lot of things, but dumb is not one of them.

So, Annette, what you need to do is show the franchise agreement AND the disclosure document (called a UFOC, 16 years ago; if you kept it, hopefully) to a good franchise attorney for advice.

That's the only way a going-forward strategy can be analyzed and developed.

Here are some useful criteria to use when evaluating a franchise attorney to retain, given your situation:

1.  Their legal practice must be "franchise-only," for at least 10 to 20 years.

2.  During this period of time, they should have ample experience helping franchise owners with departure issues and strategies (also known as "breaking out of franchise jail).

3.  He or she should have owned a successful franchise in the past.

This 3-part skill set will be the very best way for you to get the very best advice possible.  If you stick to just these three criteria, you will eliminate 98% of the franchise attorneys you talk to - which is a good thing. You want to select from the 2%.

If you'd like to contact me directly, use the franchise attorney link below.

Best of luck!

Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Attorney & Franchise Expert
Director of Operations & Mr. Franchise


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Franchise Attorney Franchise Expert MBA - Kevin B. Murphy - Mr. Franchise & Former Franchise Owner


Franchise Attorney, MBA Franchise Expert, author and instructor with 2-plus decades of franchise industry experience, including ownership of a successful franchise. I answer all business format franchise questions, how to franchise a business, issues about ongoing franchise relationships, buying a franchise, evaluating franchise investments, franchising vs. licensing (franchise vs. license), franchise disputes, franchise operations manuals, franchise expert advice in franchise lawsuits and franchise litigation, franchise agreements, FDD Franchise Disclosure Documents and intellectual property. I don't answer questions about franchises in the automotive and petroleum industries. I have drafted, reviewed and negotiated over 500 franchise disclosure documents, advised hundreds of franchise buyers and franchise companies as well as started and operated a franchise from scratch - a background not duplicated by any other franchise expert. My in-the-trenches franchise ownership and resale experiences gave me valuable insights to share with potential franchise buyers and existing as well as emerging franchise companies.


Known in the industry as Mr. Franchise, I owned, operated and sold a very successful franchise in the home improvement industry. I help individuals and companies enter and prosper in the franchise industry, have drafted, reviewed and negotiated over 500 FDD's (Franchise Disclosure Documents) and have experience filing franchise registrations in all franchise registration states such as California, Illinois, New York, etc. I am very familiar with the McDonalds franchise program, have developed a cost-savings franchise budget for companies that want to learn how to franchise a business, and pioneered a unique FDD Evaluator program for those considering a franchise investment.

Author of over 40 franchise articles, including four books on franchising and one book on trade secrets.

Avoiding Legal Pitfalls In Franchise Marketing
2009, Franchise Foundations Press

Franchise Sales Control
2009, Franchise Foundations Press

Effective Franchise Marketing
2009, Franchise Foundations Press

Implementing A Franchise Disclosure Compliance Program
2009, Franchise Foundations Press

Protecting Trade Secrets
2002, Franchise Foundations Press

Also authored foreword and edited various chapters of the following book:

The Franchise Handbook: A Complete Guide to All Aspects of Buying, Selling or Investing in a Franchise
2006, Atlantic Publishing Company


B.S. Business Administration (Finance), University of San Francisco,

Juris Doctorate (J.D.) of Law, University of San Francisco School of Law,

Active member of the State Bar of California

Master of Business Administration (M.B.A.) - International Business, San Francisco State University,

Approved Provider of MCLE by the State Bar of California, 1993 to present
Teaching franchise, licensing and intellectual property courses to attorneys in topics like franchise feasibility, international franchising, franchise marketing, franchise planning, franchise kits and others.

Awards and Honors
Selected as the premier U.S. franchise expert by the World Intellectual Property Organization (WIPO), an agency of the United Nations, in Geneva, Switzerland to speak at Singapore’s World Conference about franchising in Asian countries and developing uniform franchise regulations based on the U.S. franchise laws and regulatory model, September, 2007, hosted jointly by WIPO and the Intellectual Property Office of Singapore (IPOS).

Snapshot of Recent Franchise Expert Litigation Cases:

Nagrampa v. MailCoups Inc. and The American Arbitration Association - United States Court of Appeals for the Ninth Circuit (Argued and Submitted En Banc). Summary: provided franchise expert strategy and consulting in a case that established new franchise law by invalidating the standard arbitration provision in a California franchise agreement on the grounds it was unconscionable.

Swansons Cleaners, et al. (Superior Court jury trial). Summary: provided franchise expert consulting that re-focused the legal issues and discovered new causes of action. Testified at deposition and trial for a franchisee in its claims against the franchise company. Result: jury verdict in favor of the franchisee for $1.6 million in punitive damages and $634,000 in contract, etc. damages.

For more information, visit the Franchise Foundations website

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