Miami, FL commercial litigation attorney Robert Zarco talks about whether or not a franchisee can get out of a franchise agreement early. Franchise agreements typically incorporate provisions enabling a franchisor to terminate the agreement if the franchisee fails to meet contractual terms, obligations, or standards set by the franchisor. It is, however, infrequent for franchise agreements to afford a similar termination option for franchisees. Despite this, a franchisee has the ability to argue that, owing to the franchisor’s negligent conduct or failure to fulfill obligations, a constructive termination has occurred.

For example, if the franchisor discontinues the supply of a proprietary product crucial for the franchisee’s business operations, and such cessation is perceived as unjustified, the franchisee may assert a claim of constructive termination. In specific industries, such as hotel contracts, franchisees might engage in negotiations for an early exit window, granting them the option to terminate the agreement before its designated term concludes. Nevertheless, these arrangements are uncommon as franchisors typically prioritize the preservation of brand consistency and long-term brand value.