[Your Name] [Your Title] [Franchise Name] [Franchise Address] [City, State, ZIP] [Date] [Franchisee Name] [Franchisee Address] [City, State, ZIP] Subject: Notice of Default in Franchise Agreement Dear [Franchisee Name], I hope this letter finds you well. We regret to inform you that, as of the date of this letter, you are in default of your obligations under the franchise agreement with [Franchise Name], dated [Agreement Date]. This notice is being sent to notify you of your default and to provide you with an opportunity to cure the breaches outlined below. 1. Breach of Payment Terms: We have noticed that you have failed to make the required monthly royalty payments, as outlined in Section [Section Number] of the franchise agreement. This breach has remained uncured for [Number of Months] months, and the outstanding balance now amounts to [amount]. It is imperative that you immediately settle these outstanding payments to avoid further default. 2. Failure to Comply with Marketing Obligations: Pursuant to Section [Section Number] of the franchise agreement, you are required to conduct marketing activities to promote the [Franchise Name] brand within the designated territory. Our records indicate that you have failed to fulfill this obligation for the past [Specify Duration] months. Please take immediate action to rectify this breach. 3. Violation of Operations Manual: We have received customer complaints and conducted surprise inspections which have revealed consistent violations of the operational guidelines set forth in the Operations Manual. The Operations Manual serves as an essential tool for maintaining brand consistency and ensuring the delivery of high-quality services/products. We require you to address these violations promptly to alleviate this breach. Failure to cure these defaults within [Specify Cure Period] days from the date of this notice will result in the initiation of further legal action, which may include termination of the franchise agreement, liquidation of assets, and recovery of damages resulting from your default. We strongly urge you to contact our office immediately to discuss the issues highlighted in this letter and to develop an action plan for curing the defaults. We believe in the value of collaboration and want to work together to overcome these challenges and restore our mutually beneficial partnership. Please note that this notice is not intended to waive our rights to exercise any remedies available to us under the franchise agreement, applicable law, or otherwise. Thank you for your immediate attention to this matter. We look forward to resolving these issues promptly and continuing our successful business relationship. Sincerely, [Your Name] [Your Title] [Franchise Name]
Alaska Sample Letter for Notice of Default in Franchise Agreement
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How to fill out Sample Letter For Notice Of Default In Franchise Agreement?
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FAQ
Most franchise contracts provide that notice of termination must be given within a reasonable time. franchise agreement may state that franchisee may attempt to cure an ordinary, curable breach within a certain period of time after notice.
Once you determine to terminate your franchise agreement, you and your attorney must draft a letter and request termination in writing. The letter should detail your intention to terminate the agreement and close the franchise and be sent to the franchisor.
Often, a franchisee will have to launch a legal proceeding to prove that he or she is legally entitled to rescission, and to legally prove the damages that he or she is seeking. The legal proceeding is typically pursued in court as a lawsuit.
Early termination Essentially, a franchisee can give a written proposal to terminate the franchise agreement early, at any time. The proposal can include any term the franchisee wants, and must give reasons for why it is being made. The franchisor has 28 days to provide a substantive written response to the proposal.
For this reason, every franchise agreement includes a termination clause. While some agreements provide termination rights to the franchisee, most agreements only allow the contract to be terminated if there is a ?good cause?, which is left to each state to define.
A franchisor or franchisee can try to end an agreement early, or before the term expires. The ways that an agreement may be ended, for both the franchisor and franchisee, must be set out in the franchise agreement. It must also be summarised in the disclosure document.
Under the default process, if the franchisee or dealer, after receiving a default notice, fails to cure the alleged violation underlying the default within the time period, the franchisee or dealer may automatically be terminated.
