Practice Areas
Our People
News & Resources
Book Consultation

Q
Views10,256
I am currently running a franchise company. However, some franchisee owners do not follow our guidelines at all, and their sales are also poor, so it seems better to just terminate the contract rather than continue it. But the legal requirements for terminating a contract with a franchisee seem strict, so what should I be careful about under the Franchise Act?
Franchise Act
Answer
Published:
Author : DongIl PARK
Hello.
Under the Franchise Act, where the head office, that is, the franchisor seeks to terminate the contract with a franchisee, it must provide, with a grace period of 2 months or more, notice of the 'specific facts of the contract breach' to the franchisee.
And the 'fact that the contract will be terminated if the breach is not corrected' must also be notified.
Because not all contract breaches constitute grounds for contract termination, caution is needed.
▶ Examples where a franchise agreement can be terminated without notice
- Where the franchisee files for bankruptcy, or where compulsory execution proceedings or rehabilitation proceedings have commenced
- Where a check issued by the franchisee has its payment suspended due to dishonor or the like
- Where, due to a natural disaster or serious personal reasons, the franchisee can no longer operate the franchise business
- Where the franchisee violates statutes related to operation and receives an administrative disposition or a court judgment, thereby clearly damaging their credit
- Where the franchisee suspends business continuously for 7 days or more without a legitimate reason
However, even in such cases, if the franchisor, that is, the head office, did not notify the franchisee at a lawful time, the termination of the franchise agreement has no effect, so caution is needed.
If you wish to know in detail the requirements for terminating a franchise agreement under the Franchise Act, we recommend consulting an attorney with specialized knowledge of the relevant legal principles.

Fair Trade 변호사
법률상담예약
모든 상담은 전문변호사가 사건 검토를 마친 뒤
전문적으로 진행하기에 예약제로 실시됩니다.
가급적 빠른 상담 예약을 권유드리며,
예약 시간 준수를 부탁드립니다.
만족스러운 상담을 위해 최선을 다하겠습니다.
전화
상담 1800-7905
365일 24시간
상담접수가능

카톡
상담
카카오톡채널
법무법인 대륜 변호사

온라인
상담
맞춤 법률서비스를
제공합니다.
주요 업무사례
더보기
All fields At a glance
1/0