What happens when the term of a franchise agreement ends?
That will depend on the terms of the franchise agreement. The Franchising Code does not give franchisees an automatic right to renew an agreement. Before entering into or renewing an agreement, franchisees should ensure they fully understand what will happen at the end of the contract term. If the agreement includes an option to renew, and the franchisee wants to take up this option, the franchisee should discuss its intentions with the franchisor within a reasonable time before the agreement expires. If the agreement does not contain an option to renew, or the franchisee does not want to renew the agreement, the franchisor and franchisee should discuss what will happen when the agreement expires. Before entering into agreements, prospective franchisees should consider whether it will be possible to recoup their initial investment if the franchise agreement is not renewed at the end of the first term. If not, they should try negotiating for a longer term or for renewal options that wil
