What is the procedure for renewing a franchise agreement?

The procedure for renewing a franchise agreement in California is fairly straightforward. First, the franchisee and franchisor must come to a mutual agreement on the terms of the renewal. This includes the length of the renewal period, the payment of fees and royalties, and any other new terms that may arise. Once both parties have come to an agreement, the franchisor must file an amendment to their Franchise Disclosure Document (FDD) with the California Department of Business Oversight. This FDD must include all updated information and the new agreement. Once the franchisor has filed the amendment, they must notify all franchisees of the proposed changes. The franchisee has the right to accept or reject the proposed changes, but if they reject them, they have the right to terminate the agreement. If the franchisee accepts the proposed changes, the franchisor and franchisee will enter into a new agreement, usually referred to as a “franchise agreement.” This is the document that sets out the terms of the renewal, and it must be signed by both parties. Once all of these steps have been taken, the renewal agreement is official and both parties must abide by the terms of the agreement. If either party fails to abide by the agreement, legal action can be taken against them.

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What is the procedure for renewing a franchise agreement?

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