Work out compensation where the franchisor ends the agreement early for a network reason
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the agreement and the lawyer's figures, set out whether the agreement was entered, transferred, renewed or extended on or after 1 November 2025, which of the three early-termination reasons is said to apply, and the amounts the instructions give for lost profit, unamortised capital expenditure, goodwill that cannot be sold, winding-up costs, and stock or branded equipment that cannot be repurposed. Do not decide the compensation.
- What the lawyer must review
- The lawyer decides whether the compensation clause applies to this agreement, which factors the clause must consider, and what buy-back or compensation is required for stock and essential specialty equipment. The lawyer treats the florist example on the page as an illustration only.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Confirm the agreement was entered, transferred, renewed or extended on or after 1 November 2025 before applying these factors.
- Keep buy-back to stock and essential specialty or branded items that cannot be repurposed. The page does not require buy-back of items the franchisee can reuse.
- Do not treat this worksheet as the catalogue task that checks whether an early-exit clause exists.
- Do not state a formula the pages do not give. The pages list factors. They do not fix a dollar method.
Sources
- ACCC, ending a franchise agreement: compensation for early termination · 2026-10-22
- ACCC, the franchise agreement: return on investment and compensation · 2026-10-22
These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.
Related tasks
Draft or review a franchise disclosure document against the prescribed headingsCheck the franchisor's disclosure and any registration the jurisdiction requiresDraft or review a franchise agreement from the disclosure and the term sheetBuild a franchisee due-diligence issues list from the disclosure pack