Missouri franchise termination law

RSMo 407.405 requires 90 days' written notice before a franchise is cancelled, with listed exceptions. It sets no good cause rule and no cure period.

Missouri has no stand-alone franchise relationship act. Its rule is a notice requirement in RSMo 407.405, which sits among the Merchandising Practices Act provisions on pyramid schemes. It asks for notice. It does not ask for good cause, and it does not set a cure period.

What 407.405 says

The section says no person who has granted a franchise "shall cancel or otherwise terminate any such franchise agreement without notifying such person of the cancellation, termination or failure to renew in writing at least ninety days in advance." A federal court annotation on the section calls it a "ninety-day notice requirement for franchise cancellation" (Maude v. General Motors Corp., W.D. Mo.).

The 90 days is not required "when criminal misconduct, fraud, abandonment, bankruptcy or insolvency of the franchisee, or the giving of a no account or insufficient funds check is the basis or grounds for cancellation or termination." For those five grounds the statute asks for no set notice period.

The remedy

RSMo 407.410 lets a franchisee "suffering damage as a result of the failure to give notice" sue the franchisor in the circuit court for the circuit where the franchisor or its agent resides or can be located. A franchisee who prevails "may be awarded a recovery of damages sustained to include loss of goodwill, costs of the suit, and any equitable relief that the court deems proper." The remedy is tied to missing notice, not to the reason for termination.

Coverage is the open question

RSMo 407.400 defines a franchise as a written or oral arrangement for a definite or indefinite period in which a person grants another a license to use a trade name, trademark or service mark, with a community of interest in marketing goods or services. The definition lists liquor wholesalers as an example, and the words "including but not limited to" show the list is not closed. It also excludes relationships that do not contemplate a place of business in Missouri.

Whether an ordinary business-format franchise falls inside this definition was not confirmed, and how courts treat it was not researched. The International Franchise Association's list of 20 jurisdictions with relationship laws does not include Missouri, although its notice chart does list RSMo 407.405. No verdict is offered here.

What this page has not confirmed

No good cause requirement appears in 407.405.
No cure period appears in 407.405 or 407.410.
No anti-waiver or forum-selection language was found in 407.400 to 407.410.
Remedies elsewhere in the Merchandising Practices Act were not read.

Questions to look for in your own notice and agreement

Is the notice in writing, and what is the gap between its date and the termination date?
Does the notice rely on fraud, abandonment, bankruptcy, a bad check or criminal misconduct?
What do the agreement's own notice and cure terms say, since the statute adds no cure period?
Does the agreement name a different state's law or a forum outside Missouri?

The notice and the franchise agreement control your own dates; a lawyer licensed in Missouri can advise. Related: can a franchisor terminate, the cure period explained and states without relationship laws.