Ask A Legal Expert: What Do I Need To Know About Relief From Termination?

• Published date: 13 November 2025
• Subject Matter: Corporate/Commercial Law, Insurance, Corporate and Company Law, Contracts and Commercial Law, Insurance Laws and Products, Franchising
• Law Firm: Dale & Lessmann LLP
• Author: Ms Tamara Ramsey

The following article was originally published in Franchise Canada.

Q: What do I need to know about relief from termination?

A: What rights do franchisees have when they face termination of their franchise agreements? Was the termination done in bad faith? What if the termination was in response to a breach made by the franchisee?

Most franchise agreements contain robust termination rights so the franchisor can move quickly to prevent irresponsible franchisees from causing harm to the system. However, the franchisor's ability to exercise its termination rights does not go unchecked:

1. The franchisor must comply with the termination provisions in the franchise agreement
2. The franchisor cannot terminate in bad faith
3. Where franchisees can rectify their breach and face consequences that are disproportionate to the breach, franchisees may be able to obtain relief from forfeiture from the court

If the franchisor is threatening termination, check the franchise agreement. Franchisors are typically required to provide notice of default and an opportunity to cure monetary and operational breaches of the franchise agreement before terminating. If this is done within the cure period, then the franchisor is not entitled to terminate.

Additionally, the franchisor must not breach its common law and statutory duties of good faith and fair dealing. ¹. Both parties to a franchise agreement must act...