A franchisee brought an application seeking reinstatement of its franchise after the franchisor terminated the franchise agreement for failure to maintain an approved voicemail system.
The court found the franchisor failed to comply with the contractual termination provisions requiring thirty days’ notice to cure a default.
The franchisor’s reliance on a prior settlement agreement to justify immediate termination was rejected, and the alleged breach did not justify bypassing the contractual notice period.
The court ordered immediate reinstatement of the franchise and possession of the leased premises, with damages to be determined at trial.
The court further held that, had termination been valid, relief from forfeiture would have been appropriate given the disproportionate loss relative to the alleged default.
