While franchisors and franchisees who enter into a new relationship when they sign a franchise agreement may be in a honeymoon stage, every agreement must also contemplate what will happen upon the death or permanent disability of the franchisee. There are several options available to franchisors when drafting a franchise agreement in preparing for this eventuality, but it is important that the one chosen be fair and reasonable under the circumstances.
Some franchise agreements state that on the death or permanent disability of a franchisee, the agreement will simply be terminated. This option is of little comfort to a franchisee and his/her spouse and children. A franchisee who comes across this provision should be wary of what may be a sign of an unsupportive franchisor.