Frequently asked questions

A franchise notice of default is the franchisor's written statement that it says you have breached the franchise agreement, usually with a time to fix the problem before termination. We found no statute or court source that defines the term for franchising generally, so your own agreement and notice control. Franchisor-side lawyers writing on the International Franchise Association's site say a notice should cite the agreement section, list the facts, specify what a cure requires, give the cure period, and say so explicitly if the default is incurable.

Source: IFA, Handling Defaults and Terminations Effectively, written by two private lawyers (checked 28 October 2026).

No. The FTC Franchise Rule (16 CFR Part 436) is a pre-sale disclosure rule: it requires the franchisor to give a prospective buyer a disclosure document at least 14 calendar days before signing or payment. In 2002 testimony the FTC said the rule does not regulate the substance of the terms that control the relationship, and that relationship issues are generally governed by the private contract. Termination limits, where they exist, come from the agreement or a state or sector statute.

Source: FTC prepared statement on the Franchise Rule, 25 June 2002 and 16 CFR 436.2 (checked 28 October 2026).

No. Some states have franchise relationship statutes that require good cause or a similar standard, including California, Washington, Minnesota, Illinois and New Jersey. The International Franchise Association, an industry body, lists 20 jurisdictions with such laws. Other states have none in the sources we checked, and Missouri's statute, for example, sets a 90-day written notice rule without a good-cause requirement in the text we read. Whether a statute covers your franchise depends on its scope, and a lawyer licensed in your state can advise.

Source: IFA, Franchise Relationship Laws (industry list, not a government count) and Wash. Rev. Code 19.100.180 (checked 28 October 2026).

No source we found gives a typical cure period in franchise agreements, so we do not give one. Your period is whatever your notice, agreement and state law provide. State statutes set some figures: Washington's statute says a reasonable cure period need not be more than 30 days, California's says the cure opportunity must be no less than 60 days from the notice, and Minnesota's says the recipient has 60 days from receipt to correct the reasons stated. These apply only to franchises within each statute's scope.

Source: Wash. Rev. Code 19.100.180(2)(j), Cal. Bus. & Prof. Code 20020 and Minn. Stat. 80C.14 (checked 28 October 2026).

Not safely assumed. Federal trademark law lets a mark owner bring a civil action over unauthorized use of its registered mark in a way likely to cause confusion, and courts can grant injunctions with a rebuttable presumption of irreparable harm. Franchisor-side lawyers on the IFA site call operating after termination without an injunction in place very dangerous. We did not review court decisions on former franchisees, so whether the statute reaches your use depends on your termination date, your agreement and the facts.

Source: 15 U.S.C. 1114 and 15 U.S.C. 1116 (checked 28 October 2026).

No neutral source we found gives a franchise-specific hourly rate. Clio's October 2026 report puts the average US lawyer rate at $362 an hour across practice areas, and the State Bar of Michigan's survey of 2022 data found a median private-practice rate of $300. One franchisee-side firm states on its own page a retainer starting at $5,000 applied against hourly billings; that is that firm's own statement, not a typical price. A lawyer licensed in your state can explain the fees for your matter.

Source: Clio, Compare Average Lawyer Hourly Rate by State and State Bar of Michigan, Economics of Law Report (checked 28 October 2026).

Only if your agreement says so, and Item 17 of your Franchise Disclosure Document should summarize it. The FTC says Item 17 states whether you have the right to go to court or must use arbitration instead. Under the Federal Arbitration Act a written arbitration provision in a contract involving commerce is valid and enforceable except on grounds that would revoke any contract. Some states add limits, such as California's requirement that arbitration standards be no less than its statute's, so read your clause with a lawyer.

Source: 9 U.S.C. 2 and FTC, A Consumer's Guide to Buying a Franchise (checked 28 October 2026).

No. Under the AAA commercial fee schedule effective Sept. 1, 2025, the initial filing fee rises with the claim amount: $1,450 for claims under $75,000, $2,375 for $75,000 to under $150,000, $3,675 for $150,000 to under $300,000, and more above that. Non-monetary claims carry a $4,825 initial fee, and emergency measures a $3,500 additional fee. Arbitrator compensation is extra, and the schedule applies only if your contract points to the AAA commercial rules.

Source: AAA-ICDR Commercial Arbitration Administrative Fee Schedule (checked 28 October 2026).

The Petroleum Marketing Practices Act is a federal statute for motor fuel franchises, meaning a trademark license between a refiner or distributor and a retailer or distributor for the sale of motor fuel. It covers only those franchises, not franchises generally. A covered franchisor may terminate or not renew only on listed grounds and with notice of not less than 90 days, with an exception where 90 days would not be reasonable. If you do not sell motor fuel under a refiner or distributor's mark, it does not apply.

Source: 15 U.S.C. 2802 and 15 U.S.C. 2804 (checked 28 October 2026).

Item 17 is the part of the Franchise Disclosure Document, set by 16 CFR 436.5(q), that summarizes renewal, termination, transfer and dispute resolution terms in a table cross-referenced to your franchise agreement. It has rows for termination with and without cause, curable and non-curable defaults, post-termination non-competes, arbitration or mediation, forum and governing law. It summarizes the contract and does not replace it: the rule's lead-in tells readers to read the provisions in the attached agreements.

Source: 16 CFR 436.5(q) (checked 28 October 2026).

We found no neutral source explaining what a franchise guaranty does, so we cannot say. What the sources show is narrow: Item 10 of the Franchise Disclosure Document must disclose whether a person other than the franchisee must personally guarantee franchisor-offered financing, and the franchisee's potential liabilities upon default. Whether a guaranty in your own papers makes you liable depends on its wording and your state's law, so show it to a lawyer licensed in your state.

Source: 16 CFR 436.5(j), Item 10 (checked 28 October 2026).

Read the whole notice, note its date, the date you received it and how it was delivered, then find the agreement sections it cites on default, cure, notice and dispute resolution. Franchisor-side lawyers on the IFA site advise taking a default threat very seriously and documenting compliance efforts in writing; that is their advice, not a legal rule. The FTC says to choose a lawyer experienced in franchise matters. Your notice and agreement control your own dates, and a lawyer licensed in your state can advise.

Source: IFA, Handling Defaults and Terminations Effectively and FTC, A Consumer's Guide to Buying a Franchise (checked 28 October 2026).