Legal Intellectual
Daeryun specialist lawyers will answer your questions.
Q
Franchise attorney, is there a risk if the headquarters unilaterally terminates a franchise agreement?
Views63,609
I am running a franchise business, and there are often cases in which some franchise stores do not sufficiently follow the headquarters' guidelines or direction. In such cases, there seems to be no alternative other than terminating the contract with the franchise store, but could franchise litigation arise even if the headquarters terminates the franchise agreement? I would like to know in detail from a franchise attorney about the legal risks regarding this issue.
franchise attorney
franchise litigation
franchise specialist attorney
Answer to Related Inquiry
Author: 김국일
Yes, terminating the contract of a franchisee may lead to franchise litigation.
The headquarters, that is, the franchisor, must meet several requirements when it seeks to terminate a franchise agreement with a franchisee.
First, only when several grounds that make it difficult to continue the franchise agreement apply can the headquarters terminate the franchise agreement.
Representative grounds on which a franchise agreement may be terminated
▶ where the franchisee files for bankruptcy, or compulsory execution proceedings or rehabilitation proceedings have commenced
▶ where the bills or checks issued by the franchisee have had payment suspended due to dishonor or similar reasons
▶ where the franchisee can no longer operate the franchise business due to a natural disaster, a serious personal reason, or the like
▶where the franchisee has received an order revoking a qualification, license, or permit, or a business suspension order, for violating statutes related to the operation of the franchise store
If it is difficult to determine whether such a ground exists, it is advisable to seek advice from a franchise attorney.
If such a ground arises and the franchisor wishes to terminate the franchise agreement, the franchisor must notify the franchisee with a grace period of two months or more.
In particular, notice must be given in writing two or more times, stating the "specific facts of the contract violation" and stating that the "contract will be terminated if the violation is not corrected." This is mandatory.
If a franchise agreement is terminated without such notice, it has no legal effect, so it may lead to litigation; therefore, it is advisable to have it reviewed by a franchise attorney.
Daeryun's Key Strengths

Litigation strategy using Daeryun's own AI & IT technology
More than 240 key members
1,200+ cases handled per month
* 2025년 월평균 기준
Complies with Korean Bar Association Advertising Regulations Article 4 (1)
more strengths
Book a legal
consultation with an attorney
All consultations are reviewed by a specialized attorney first,
so they are conducted by appointment only.
1800-7905
Phone consultation
Available 24 hours a day, 365 days a year

Online consultation
We provide tailored
legal services for our clients.

Chat consultation
KakaoTalk channel
Daeryun Law LLC Attorneys
Related Members
View moreKey Case Studies
View more- Won the Case
Legal Advisory Provided for a Client Defrauded in a Franchise Contract

- Won the Case
Franchisee Who Filed Suit Against a Franchisor, Full Claim Granted

- Dismissal of the plaintiff's claim
A Client Sued in a Civil Action for Sexual Harassment Obtains Dismissal of the Claim With Daeryun's Help

Related Practice Areas
View moreConsult in other languages
Popular Columns
View moreHow to Register a Quasi-Investment Advisory Business, and Points to Note When Providing Stock Tips

Copyright Infringement: Severity of Punishment, Damages, and Response Methods

The Meaning of Corporate Rehabilitation Proceedings, the Measures Involved, and Points Requiring Caution

The Effect of a Non-Disclosure Agreement, Liability for Breach, and Key Points to Know When Drafting One

Compliance Obligations Under the Fair Transactions in Franchise Business Act and Cases of Violation

Do you have more questions?














