Following summary judgment determining that a franchisor’s 12‑month termination notice to a long‑time franchisee was inadequate, the court determined the appropriate reasonable notice period and resulting damages.
The court rejected arguments that the notice period should correspond to a proposed franchise renewal term or to employment-law notice ranges exceeding 20 months.
While acknowledging that franchise relationships share characteristics with employment relationships, the court emphasized that franchisees remain independent contractors and must bear business risk.
Considering the length of the relationship, the franchisee’s satisfactory performance, the absence of bad faith, and the independent contractor status, the court held that 18 months’ notice was reasonable.
Damages equal to six additional months of income were awarded.