Received a Breach Notice. What can I do?

The first step is to immediately contact an experienced franchise lawyer or solicitor to review the Breach Notice. Too often Breach Notices are issued incorrectly, do not provide relevant information and/or information that enables a franchisee to take steps to remedy the breach.

It is critical to address the breach notice to ensure that the Franchisor does not issue a Termination Notice to try to take possession of the franchise business. It is also an opportunity for the parties to attend mediation to try to resolve issues and rebuild relationships. There are dispute resolution provisions available to the Franchisee and Franchisor under the Franchising Code.

I have just received a Termination Notice. What should I do?

Immediately contact a franchising lawyer or solicitor to discuss your particular possession. The Franchisor may try to take possession of the franchise business and lock the Franchisee out. Termination Notices are rare with Franchisors, as they can create disharmony within the franchisor’s business, require media involvement and legal costs to defend the franchisor’s position. More often than not, the parties will come to an agreement to take over the franchisee’s business or assist in the sale of the franchisee’s business. Newhouse & Arnold have represented and advised a number of franchisees who have received breach and /or termination notices. Read an article in the Sydney Morning Herald about breach & termination notices for a well known Australian franchise.

Dispute with the Landlord

It is important to discuss disputes with the Landlord with an experienced franchise lawyer or solicitor. More often than not, there will be obligations set out in the lease/licence, which are linked to various contractual dispute mechanisms. You may also have rights to appeal to a Tribunal or Court to resolve the dispute. However, most franchise agreements link many breaches of obligations under a lease or licence with the landlord, as fundamental breaches under the franchise agreement, resulting in a breach and/or termination notice to be issued. It is important to discuss potential disputes with an experienced franchise lawyer at the earliest opportunity. Examples of disputes with a landlord include rent disputes, fit for purpose (eg. requirement to install sunshades), hours of operation, permitted use (including what can be sold ), water damage, pests, access, construction and so on.

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