Can Corcoran terminate the franchise agreement without cause?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
| THE FRANCHISE RELATIONSHIP | ||||
|---|---|---|---|---|
| Provision | Section in Agreement | Summary | ||
| a. Length of the franchise term | Section 1.5 of the Franchise Agreement; Section 1 of the Location Addendum | Commences upon the Opening Date and expires on the date 10 years from the Opening Date. We have the right, however, to negotiate with you a greater or lesser term under your Franchise Agreement. | ||
| Section 2 of the Limited Purpose Office Addendum | One-year initial term with a right to extend for additional one year terms. | |||
| b. Renewal or extension of the term | Section 16.1 of the Franchise Agreement; Section 1 of the Location Addendum Section 2 of the Limited Purpose Office Addendum | No renewal rights. If we grant you an additional term, we may require you to sign our then current franchise agreement or other documentation with materially different terms. Term is automatically extended for additional one-year periods until terminated in accordance with the terms of the Addendum | ||
| c. Requirements for you to renew or extend | Sections 1.5 and 16.1 of the Franchise Agreement | No renewal rights. If we grant you an additional term, we may require you to sign our then current Franchise Agreement or other documentation with materially different terms. | ||
| d. Termination by you | Section 16.2.5 of the Franchise Agreement Section 7 of the Limited Purpose Office Addendum | Subject to state law, if a majority owner dies or becomes disabled, you may elect to terminate the Franchise Agreement if certain conditions are satisfied. The Franchise Agreement can also be mutually terminated. Further you may terminate the Franchise Agreement under any grounds permitted by law. Subject to state law, either party may terminate upon 30 days' notice. | ||
| e. Termination by us without | None | Not applicable. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 64–67)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, Corcoran can terminate the franchise agreement without cause under specific circumstances. The standard Franchise Agreement does not allow for termination without cause. However, the Limited Purpose Office Addendum states that either party may terminate the agreement upon 30 days' notice.
This means that if a franchisee signs the Limited Purpose Office Addendum, Corcoran has the right to terminate the franchise agreement for any reason, or no reason at all, by providing 30 days' notice. This is a significant point for prospective franchisees to consider, as it gives Corcoran considerable power over the franchise relationship in those specific instances.
Most franchise agreements include specific conditions or breaches that must occur before the franchisor can terminate the agreement. The ability to terminate without cause is less common and typically only occurs in specific situations or with certain types of franchise agreements, such as the Limited Purpose Office Addendum offered by Corcoran. Prospective franchisees should carefully review the terms of the franchise agreement and any addenda to understand the termination rights of both parties.