Check your notice
Your notice and your franchise agreement are the first places to look for your cure period. Below is what a franchise notice normally covers, where to find each item, and the questions to look for in your own documents.
This page does not assess your situation
1. What kind of notice it is
A notice of default, a notice of termination and a notice of non-renewal are different documents with different consequences. The FTC's consumer guide says a franchisor can end an agreement for reasons including failure to pay royalties or meet performance standards, and that renewals are not automatic. The label on the notice and the clause it cites are the first things to read.
Question to look for: Does the notice call itself a default, a termination, a non-renewal, or a mix? Which section of the franchise agreement does it cite?
2. The stated reasons
Many state statutes require the franchisor to state its reasons in writing. For example, Minnesota's statute asks for written notice of all reasons for termination, and Wisconsin's asks for a notice that states all the reasons. Whether any statute applies to your franchise depends on where the franchised business is and what the statute covers; this page cannot tell you that.
Question to look for: Does the notice list every reason, with dates and amounts, or only a general complaint?
3. Any cure period, and where it comes from
A cure period can come from the franchise agreement, from a state statute, or both. The FTC's guide says many franchise contracts give a chance to cure an occasional failure to comply while keeping the right to terminate for other failures. Item 17 of the Franchise Disclosure Document summarises which defaults are curable and which are not, and says to read the provisions in the agreement itself.
Question to look for: Does the notice give a number of days to cure? From what date does it count them? Does it say which default is curable?
4. What the franchisor says happens next
A notice normally says what the franchisor will do if the default is not cured, for example terminate the agreement on a date or demand that you stop using the brand. The FTC warns that if a franchise is terminated, the franchisee is likely to lose the entire investment. Some contracts also restrict competing businesses after termination.
Question to look for: Does the notice give a termination date? Does it mention the brand, the premises, a non-compete or money owed?
5. How disputes must be handled
The FTC says Item 17 of the disclosure document states whether the franchisee may go to court or must use arbitration. The franchise agreement itself has the clause, along with any forum and choice-of-law terms. The notice may refer to a mediation or arbitration step.
Question to look for: Does the agreement send disputes to arbitration or to a particular court? Does the notice mention a pre-dispute step?
6. How the notice was delivered, and the date to count from
Whether time runs from the date on the notice, the date it was sent or the date it was received can depend on the notice clause in the franchise agreement and, in some states, on the statute. This site cannot say which date applies to you.
Question to look for: How was the notice delivered (mail, courier, email, hand)? On what date? Does the agreement's notice clause say when delivery counts?
If the notice is unclear
Because cure periods can be short, it helps to ask someone about an unclear notice soon. You can read how to check a lawyer's license or look at free and low-cost help.