Connecticut franchise termination law
Conn. Gen. Stat. 42-133f requires good cause and 60 days' written notice stating the cause. The statute states no cure period.
Connecticut's termination rule is in Conn. Gen. Stat. 42-133f, part of chapter 739. It requires good cause and a 60 day written notice that states the cause. It does not state a cure period, and this page does not supply one.
Coverage
Sections 42-133e to 42-133g apply to franchise agreements entered into, renewed or amended on or after 1 October 1972, "the performance of which contemplates or requires the franchisee to establish or maintain a place of business in this state." A franchise is an "oral or written agreement or arrangement" with two parts: a right to sell goods or services under a marketing plan or system prescribed in substantial part by the franchisor, and a business "substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising or other commercial symbol." The definition states no minimum fee. This page offers no view on whether a given business is covered.
Good cause and notice
Under 42-133f(a), a franchisor may not terminate, cancel or fail to renew "except for good cause." Good cause includes, but is not limited to, "the franchisee's refusal or failure to comply substantially with any material and reasonable obligation of the franchise agreement" or the real-property reasons in subsection (e). A court annotation on the statute adds that a franchisor may also show "an equivalent business reason of a similar nature" (250 Conn. 334).
The franchisor must give written notice at least sixty days ahead, "with the cause stated thereon."
Shorter notice
| Ground named in the statute | Notice the statute allows |
|---|---|
| Voluntary abandonment of the franchise relationship | 30 days in advance |
| Conviction of an offense punishable by more than one year in prison and directly related to the franchise business | Any time after the conviction, effective on delivery and written receipt |
| Non-renewal because of a real-property event under subsection (e) | At least six months before the current agreement expires |
Subsection (e) covers franchises where the franchisor leases real property to the franchisee, for example a sale or lease of the property to a non-affiliate, conversion to another use, or loss of the franchisor's own lease.
Compensation, term and remedies
On termination, the franchisee is to be allowed "fair and reasonable compensation" for inventory, supplies, equipment and furnishings bought from the franchisor or its approved sources (42-133f(c)). Franchises entered into or renewed on or after 1 October 1973 may not run for a term under three years (42-133f(d)).
Under 42-133g(a), a franchisee may sue in Superior Court for damages and, where appropriate, injunctive relief, and a successful franchisee is entitled to costs "including, but not limited to, reasonable attorneys' fees." Under 42-133f(f), a waiver of a franchisee's rights under 42-133f or 42-133g in an agreement entered into or amended on or after 12 June 1975 is void.
Leased premises matter in a practical way. If the franchise lease ends with the franchise, 42-133g(b) says a franchisee given proper notice has no right to occupy the premises on the termination date "unless such franchisee is granted a temporary injunction." Read the lease alongside the notice.
Questions to look for in your own notice and agreement
- Does the written notice state the cause, and how many days ahead of the end date was it given?
- Which ground does the notice rely on: a failure to comply, abandonment, a conviction or a real-property reason?
- Does the agreement give a cure period of its own, since the statute does not?
- Does the franchise lease end automatically with the franchise, and on what date?
- What did you buy from the franchisor or approved sources that would be part of any compensation?
Your notice and agreement control your own dates. A lawyer licensed in Connecticut can advise on how the statute applies. See also the notice of default explained, incurable defaults and state laws compared.