Franchisors exercising an early termination and collecting liquidated damages is a potential conflict of interest where a franchisor can profit from terminating a franchisee. FFI’s position is that liquidated damages clause should not be enforceable when a franchisor terminates a franchisee and should be limited in all other cases of termination.

Points of Advocacy

• No liquidated damages for franchisor initiated terminations .
• Damages limited to amount reasonable and maximum of six month franchisee fees .
• No termination without due judicial process.