Michigan franchise termination law

Michigan's Franchise Investment Law voids termination clauses without good cause and caps the needed cure at 30 days. Read from a statute mirror.

Michigan frames its termination rule as a list of contract terms that are void. Section 27 of Act 269 of 1974, the Franchise Investment Law (MCL 445.1527), says certain provisions are "void and unenforceable if contained in any documents relating to a franchise."

The wording below was read from Justia's copy of the 2025 compiled laws, because the Michigan legislature's site was unreachable on 28 October 2026. Check the official text before relying on it.

Good cause and the 30 day figure

Under MCL 445.1527(c), a provision is void if it "permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause." The section adds that good cause "shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure."

Read plainly, that is a ceiling on the opportunity to cure, not a promise of 30 days. The words "need be" speak to what a franchisor must allow. Whether your agreement gives more is a question for the agreement. No minimum notice period and no list of no-cure exceptions were found in this section.

Non-renewal

The non-renewal rule is narrower than in many states. Subsection (d) voids a clause letting a franchisor refuse to renew without fairly compensating the franchisee for the fair market value of inventory, supplies, equipment, fixtures and furnishings, but only if the franchise term is under 5 years and either the franchisee is barred from continuing substantially the same business under another trademark, or did not get at least 6 months' advance notice of non-renewal. Subsection (e) also voids a clause allowing refusal to renew on terms not generally available to similar franchisees. The section states it does not require a renewal provision.

Coverage

The act defines a franchise as a contract, express or implied, oral or written, between two or more persons that meets a multi-part test, which begins with the grant of a right to offer, sell or distribute goods or services. The remaining parts of the test, and the rules on how closely a franchise must connect to Michigan, were not read for this page (MCL 445.1503 to 445.1526). No verdict is offered on whether any particular business is covered.

Remedies, time limit and venue

Time limit: an action to enforce liability under the act must be brought within 4 years "after the act or transaction constituting the violation" (445.1533).
Private damages: the express damages-and-attorney-fees clause in section 31 is tied to offering or selling a franchise in violation of sections 5 and 8. Section 34 says civil liability in favor of private parties does not arise by implication. A franchisee's own remedy for a void section 27 termination clause is therefore not stated in the text read, and this page does not state one.
State enforcement: under section 35 the Attorney General's department may sue to enjoin, with a presumption of immediate and irreparable harm where a void section 27 provision is present.
Venue and waivers: a provision requiring arbitration or litigation outside Michigan is void (445.1527(f)), as is a required release or waiver of the act's rights. A settlement of existing claims is allowed.

Questions to look for in your own notice and agreement

Does the notice cite a specific lawful provision of the agreement as the failure?
Does it offer any opportunity to cure, and how many days from which date?
Does the agreement let the franchisor terminate without cause, and would that clause fall under section 27(c)?
What is the franchise term, and does the agreement allow you to run a similar business under another mark after it ends?
Does the agreement require arbitration or a lawsuit outside Michigan?

Your notice and agreement control your own dates. A lawyer licensed in Michigan can advise on how the act applies. More background: what a default notice states, arbitration clauses and non-renewal.