Being served with a breach notice from your franchisor can be upsetting and stressful, but don’t panic.

Fortunately, under the Franchising Code of Conduct, the franchisor must give you an opportunity to remedy any breaches prior to terminating your franchise agreement. Below, I’ve set out four steps to take if you find yourself in breach of the franchise agreement.

1. Identify the breaches

Read the breach notice carefully and identify exactly what the breach involves. The breach notice should be relatively specific, so if you have any confusion about exactly what the breach entails, contact your franchisor immediately or seek legal advice. For example, “non-payment of royalties” might be too vague as it doesn’t identify the actual amount outstanding and period to which the royalties relate.

2. What is the remedy required?

Under the Code, the franchisor must tell you what it requires to be done to remedy the breach. Make sure you clearly identify what this is, so that you can properly remedy the breach. Using the example above, this might be to pay the total sum of royalties outstanding by a specified due date. Which leads me to step three.

3. What is the due date for the remedy?

The breach notice will specify a due date for when the breach is required to be remedied, which must be a reasonable time. If you feel that the time allowed is unreasonable, contact your franchisor and explain your reasons for why you feel a longer time is necessary.  Note that the franchisor does not need to allow more than 30 days under the Code.

4. Take action

Now that you’ve identified the breaches, the remedy required and the due date for remedy, it’s time to take action. Make sure you remedy the breach in full, as otherwise you may still be in breach of your franchise agreement. Also be sure to let the franchisor know that you’ve taken action, as this will show that you are serious about complying with your franchise agreement. Hopefully once that’s done, you can put the breach notice behind you and continue on with running your business!

All four steps aside, if you are confused by the breach notice or don’t agree that you’re actually in breach, contact a franchising lawyer immediately. Your lawyer will be able to advise you on the breaches and the next best steps to take.