Can the Corcoran franchise agreement be terminated?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
- E.
Termination and Non-renewal: Section 16 of this Agreement relates to renewal and termination of the franchise.
California Business and Professions Codes Sections 20000 through 20043 provide rights to you concerning termination, transfer, or non-renewal of the franchise.
The Federal Bankruptcy Code also provides rights to you concerning termination of the Franchise Agreement upon certain bankruptcy-related events.
If this Agreement contains a provision that is inconsistent with the law, the law will control.
- G. Termination by Franchisee.
The franchisee may terminate the franchise agreement under any grounds permitted under state law.
- A. Termination and Non-renewal: Section 16 of this Agreement relates to renewal and termination of the franchise. With respect to franchises governed by Minnesota law, Franchisor will comply with Minnesota Statutes, Section 80C.14, Subdivisions 3, 4, and 5, which require, except in certain specified cases, that Franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, Section 16 of the franchise agreement addresses the renewal and termination of the franchise. Additionally, the FDD mentions that franchisees may have certain rights concerning termination, transfer, or non-renewal of the franchise based on the California Business and Professions Codes Sections 20000 through 20043 and the Federal Bankruptcy Code. For franchisees in Minnesota, Corcoran will comply with Minnesota Statutes, Section 80C.14, Subdivisions 3, 4, and 5, which require, except in certain specified cases, that Franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the Agreement. For franchisees in Washington, the franchisee may terminate the franchise agreement under any grounds permitted under state law.
However, the FDD also indicates that certain provisions within the franchise agreement may not be enforceable under specific state laws. For instance, a clause requiring the application of New Jersey laws might not be enforceable in California. Similarly, liquidated damages clauses and covenants not to compete extending beyond the franchise term may also face unenforceability issues under California law.
Prospective Corcoran franchisees should carefully review Section 16 of the franchise agreement and consult with legal counsel to understand their rights and obligations regarding termination and non-renewal, particularly in the context of their specific state laws. Understanding these provisions is crucial for making informed decisions and mitigating potential risks associated with the franchise agreement. The interplay between the franchise agreement and state laws can significantly impact a franchisee's ability to terminate the agreement and the consequences thereof.