Franchise Termination Letter


A company writes a Franchise Termination Letter to a franchise with an intention of terminating their franchise contract. A franchise is a strategy used in business where a company provides opportunities to individual business people who manage a branch of the company. Franchising helps the company reduce its costs of production because the investment is being provided by an individual businessman who will run the business as an entrepreneur. The franchise agreement will have various clauses that should be agreed upon by both parties.

The franchise termination letter is written by the company to terminate such franchise that has been established and already functioning. The franchise agreement may be terminated for various reasons including lack of compatibility, violation of the agreement, or the failing business. The letter for termination of the franchise must include reasons as to why the company seeks to terminate the franchise. The letter may also mention the conclusion of sharing financial assets and other requirements to end the agreement.

Sample Letter

The Following is a sample for a Franchise Termination Letter.


John Doe,

Franchise Development Manager,


East Park Avenue,


Date: 22 July 1776.


Hart Pickle,

Franchise Owner,

Woodworth- East Branch,

West Park Avenue,


Dear Sir,

Subject: Franchise termination letter.

I write this letter to bring to your notice that the Council of Franchise Development has decided to terminate your franchise with our company, effective from 22 August 1776. The Council found upon review that your franchise has violated the code of conduct set by the Board of Directors of Woodworth. Many customers have complained directly to the customer relationship manager that your franchise branch has violated various health standards and community standards of the company and the city council.

Reviewing the financial side of the argument, your franchise has experience losses for a consecutive period of 3 years. The losses amounted to one million USD over the three financial years mentioned. The Council has decided that continuation with this contract would influence the reputation of the company in an adverse manner and therefore termination franchise agreement was agreed as the best method to proceed.

I am sympathetic to your situation, but I am afraid that nothing worthwhile can occur from our relationship in this franchise. Therefore, please treat this as a termination notice. You may contest this decision through writing, addresses to the General Manager for Utopia.  Financial apportionment will be discussed with you within thirty days.

Warm regards,

John Doe,

Franchise Development Manager.

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