Alternatives to Termination: Effective Means of Facilitating Compliance or Merely Delaying the Inevitable?

This article explores alternatives to terminating a franchise agreement when a franchisee is in default. It discusses contractual provisions that franchisors can include in their agreements, such as remedial training and restrictions on access to financial measures, to facilitate compliance and cure defaults. The article also examines the use of step-in rights, which allow the franchisor to assume operation and management of the franchisee's business under certain circumstances. It emphasizes the importance of considering statutory provisions and balancing legal and business factors when deciding whether to terminate a franchise agreement or exercise contractual alternatives to termination. The authors recommend including permissive provisions in franchise agreements that allow for the exercise of contractual alternatives to termination. [Extracted from the article]