Exiting A Franchise
Franchise Surrender Deed Reviews
for franchisees who are exiting their franchise agreement
Ending the franchise is only part of what a surrender deed does.
A surrender deed may also release claims, preserve restraints, confirm payments and create obligations that continue after you leave. We review the deed so you understand not just how the franchise ends, but what you are agreeing to afterwards.
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What is a franchise surrender deed?
A franchise surrender deed or deed of release is the document which terminates or surrenders the franchise agreement and sets out what is required after the franchise agreement has ended.
It may be used when a franchisee sells the franchise business, negotiates an early exit with the franchisor or otherwise agrees with the franchisor to bring the franchise agreement to an end.
Importantly, signing the deed may do much more than simply end the franchise agreement. It may affect existing claims and liabilities and impose obligations that continue after the franchise has ended.
What should you check before signing a surrender deed?
Because while the franchise may end, some obligations may not.
Release of Claims
Are you releasing the franchisor from existing or potential claims?
Money still owing
Does the deed say that you owe fees, costs or other amounts?
Restraints
Are you restricted from operating or working in another business after leaving?
Guarantees
Are you and any guarantors actually being released from any future claims?
Continuing Obligations
Confidentiality, intellectual property and other obligations.
What was negotiated?
Does the document accurately record the commercial deal agreed?
What does the release in a surrender deed mean?
One of the most important provisions in a surrender deed is usually a release.
The deed may require you to release the franchisor and its related parties from claims arising out of the franchise agreement or the operation of the franchise business.
Before giving a release, you should understand exactly who is being released, what claims are covered and whether the release is mutual.
Once a release is given, you may not be able to bring a claim later - even if you subsequently discover information that you did not know when you signed the deed
When might you be asked to sign a surrender deed?
On Renewal
Some franchisors require a franchisee to enter into a surrender deed when they enter into a new franchise agreement.
What do we review in a franchise surrender deed?
We don't review the surrender deed in isolation. We consider it against your franchise agreement, the circumstances in which the franchise is ending and any agreement you have reached with the franchisor.
We will provide you with advice about
- termination/surrender provisions;
- releases;
- payments and outstanding amounts;
- restraints of trade;
- confidentiality;
- intellectual property;
- guarantees;
- indemnities;
- continuing obligations;
- return of property;
- lease/premises obligations where relevant;
- whether the deed accurately reflects the negotiated agreement.
Franchise Surrender Deed Review
Before you sign your surrender deed
A surrender deed can affect more than just the end of your franchise agreement. If may include releases, restraints, payment obligations and other terms that continue after you leave the franchise.
We can review the surrender deed, explain what it means for you and identify any terms that should be addressed before you sign.
Already have a deed? Send it to us and we can let you know the next steps