When the franchisor signs a franchise agreement with a franchisee it is very much like the marriage only it has a specific infinite time period called a term. Upon the end of the franchise agreement period a franchisor and a franchisee may agree to continue their marriage and renew the franchise agreement or one or more parties may decide to go their separate ways. A franchisor may have good reason for not wishing to renew the franchise and franchise law predicts that without a good reason failure to renew could in fact create litigation.

However, if a franchisor states all possible reasons in advance that they were may not renew the franchise agreement with a franchisee in the initial franchise agreement, then the chances of litigation are lessened. Below is a copy of a clause that I used in both our master franchise agreements, as well as our individual franchisee agreements, which stated that conditions in which our company may choose not to renew;

1.3.3 Refusal to Renew

Notwithstanding the foregoing provisions, Franchisor will not be obligated to renew Franchisee