Franchise Termination & Non-Renewal Disputes

Wrongful termination, cure rights, and non-renewal challenges under California franchise law.

When a franchisor terminates your franchise or refuses to renew, your livelihood is at stake. California law provides significant protections - but you must act quickly and strategically to preserve your rights.

Time-sensitive: If you've received a termination or non-renewal notice, you likely have limited time to respond and cure. Consult an attorney immediately - don't wait until the deadline passes.

Evidence Checklist

Termination or non-renewal notice

Franchise Agreement (check term, renewal provisions)

All prior default notices and your cure responses

Inspection reports and your remediation efforts

Royalty payment records proving compliance

Correspondence with franchisor representatives

Evidence of franchisor's true motive (if pretextual)

Records of other franchisees treated differently

Investment in the franchise (build-out, equipment, goodwill)

Financial statements showing franchise profitability

Injunctive Relief

In urgent situations, you may need to seek a temporary restraining order (TRO) or preliminary injunction to prevent termination while litigation proceeds. Courts consider:

Arbitration alert: Many franchise agreements require arbitration. You may still be able to seek emergency injunctive relief in court, or emergency relief from the arbitrator. Check your agreement carefully.

What's At Stake

In a wrongful termination case, damages may include:

Demand Letter Templates

Response to Termination Notice

"I am in receipt of your termination notice dated [date], which alleges [summarize stated grounds]. I dispute that good cause exists for termination under the California Franchise Relations Act, Business and Professions Code § 20020, for the following reasons: [Choose applicable:] 1. The alleged violations have been cured. As documented in my letters dated [dates], I have [describe cure actions]. Attached please find [evidence of cure - receipts, photos, inspection reports]. 2. I was not given reasonable opportunity to cure. Your notice demands cure within [X] days, which is insufficient time to [complete required action]. I request an extension to [date] to complete the necessary corrections. 3. The alleged violations are pretextual. The true reason for this termination appears to be [describe - e.g., franchisor's desire to recapture this profitable location / retaliation for my involvement in the franchisee association / my refusal to sign the new franchise agreement with materially worse terms]. 4. The notice fails to comply with statutory requirements. [Describe deficiency - inadequate notice period, failure to state all reasons, etc.] I demand that you: - Withdraw the termination notice - Allow me to continue operating under the Franchise Agreement - Confirm in writing that my franchise remains in good standing If you proceed with this wrongful termination, I will seek all available remedies including injunctive relief to prevent termination, damages for lost profits and investment, and attorneys' fees."

Cure Notice Response

"I am in receipt of your default notice dated [date], alleging [summarize violations]. I take compliance seriously and have taken the following corrective actions: 1. [Violation 1]: [Describe specific cure action, date completed, evidence] 2. [Violation 2]: [Describe specific cure action, date completed, evidence] 3. [Violation 3]: [Request extension if needed, with specific timeline and reason] Please confirm in writing within 10 business days that: (a) The above items have been cured to your satisfaction; and (b) My franchise is in good standing. If you believe any items remain uncured, please specify in detail what additional actions are required. I am committed to full compliance with the Franchise Agreement and will address any legitimate concerns promptly."

Non-Renewal Challenge

"I am in receipt of your non-renewal notice dated [date], received on [date]. This non-renewal violates the California Franchise Relations Act for the following reasons: [Choose applicable:] 1. Inadequate notice: Business and Professions Code § 20027 requires at least 180 days written notice before non-renewal. Your notice provides only [X] days. The non-renewal is therefore void, and I am entitled to renewal under the existing terms. 2. Pretextual non-renewal: The non-renewal offer includes materially different terms that are designed to be unacceptable, including [describe - higher royalties, reduced territory, unreasonable renovation requirements, removal of renewal rights]. This constitutes a constructive refusal to renew. 3. Discriminatory treatment: Other franchisees in similar circumstances have been offered renewal on standard terms. [Provide examples if known.] I have operated this franchise profitably for [X] years, maintained the brand standards, and invested over $[amount] in this location. I demand renewal on the same material terms as my current agreement, or on the standard terms offered to other renewing franchisees. If you refuse to renew in good faith, I will pursue all available remedies including damages for my lost investment and going-concern value."

Facing Termination or Non-Renewal?

Time is critical. I help franchisees fight wrongful termination and non-renewal throughout California.

Email: owner@terms.law