Following the February 2011 collapse of Redgroup Retail and its book retailing outlets Borders and Angus & Robertson, it was reported that a group of Angus & Robertson franchisees chose to terminate their franchise agreements on the basis of alleged breaches of those agreements by Angus & Robertson.
Although it has since been reported that the same group of franchisees may have resolved their differences with the administrator of Redgroup Retail, the action taken by these franchisees highlights the issue of when a franchisee can terminate a franchise agreement.
Breach of contract
With the exception of cooling-off provisions, it is extremely rare to find clauses in a franchise agreement that give a franchisee a contractual right to terminate the agreement. However, the absence of such clauses does not mean that franchisees will never have a legal right to terminate a franchise agreement.