Procedural Requirements for Termination and Nonrenewal

• Pages: 391-396

391

APPENDIX E

Procedural Requirements

for Termination and Nonrenewal

(as of June 1, 2015)

Arkansas

The franchisor may not terminate or fail to renew without giving the franchisee

90 days’ notice setting forth the reasons for termination or intention not to re-

new. In the case of termination, the franchisor must give the franchisee 30 days

in which to cure.

Notice and cure are not required for termination due to:

(1) voluntary abandonment,

(2) criminal conviction,

(3) any act by the franchisee that substantially impairs the franchisor’s trade-

mark or trade name,

(4) institution of insolvency or bankruptcy proceedings by or against a fran-

chisee or an assignment for the benefit of creditors,

(5) loss of either party’s rights to occupy the premises, or

(6) failure to pay sums due to the franchisor within ten days after receipt of

notice.

A ten-day cure period is required for termination or failure to renew due to:

(1) repeated deficiencies, within a twelve-month period, giving rise to good

cause based on noncompliance with the franchisor’s requirements, or

(2) failure by the franchisee to act in good faith and in a commercially rea-

sonable manner.

California

Termination: The franchisor must give notice “and a reasonable opportunity,

which in no event need be more than 30 days, to cure.” The notice period is not

specified. Nonrenewal: The franchisor must give the franchisee at least 180

days’ notice of its intention not to renew.