50Termination by franchisee—cooling off periods for new franchise agreements

50 Termination by franchisee—cooling off periods for new franchise agreements

Cooling off period—general (1) A franchisee may terminate a franchise agreement within 14 days after entering into the agreement, unless the franchisee has given the franchisor a written notice under subsection (7) opting out of being able to terminate the franchise agreement under this subsection. Cooling off period—lease or occupancy of premises (2) Subsections (3) and (4) apply if, immediately before the franchise agreement is entered into: (a) there is a proposal that the franchisor, or an associate of the franchisor: (i) lease premises for the franchised business to the franchisee; or (ii) allow the franchisee to occupy premises for the franchised business under a right (an occupancy right) other than a lease; and (b) the lease or occupancy right is not in force. (3) The franchisee may terminate the franchise agreement within 14 days after either of the following, unless the franchisee has given the franchisor a written notice under subsection (7) opting out of being able to terminate the franchise agreement under this subsection: (a) the day the franchisee receives from the franchisor or associate the first document setting out the terms of the proposed lease or occupancy right; (b) if, on a later day, the franchisee receives from the franchisor or associate a document setting out the terms of the proposed lease or occupancy that are not substantially identical to the terms set out in the first document (excluding changes to the terms that were requested by the franchisee)—that later day. (4) The franchisee may terminate the franchise agreement within 14 days after entering into the lease or being granted the occupancy right if: (a) before entering into the lease or being granted the occupancy right, the franchisee did not receive from the franchisor or associate a document setting out terms of the proposed lease or occupancy right that are substantially identical to the actual terms of the lease or occupancy right (excluding changes to the actual terms of the lease or occupancy right that were requested by the franchisee); and (b) the franchisee has not given the franchisor a written notice under subsection (7) opting out of being able to terminate the franchise agreement under this subsection. Application of subsections (1), (3) and (4) (5) Subsections (1), (3) and (4) do not limit one another.

Note: Those subsections do not provide for the franchisee to terminate another agreement with the franchisor (such as a lease of premises from the franchisor) or an agreement with anyone else.

(6) Subsections (1), (3) and (4) do not apply to: (a) the renewal of an existing franchise agreement; or (b) the extension of the term or scope of an existing franchise agreement; or (c) the transfer of a franchise agreement that does not involve entry into a new franchise agreement between the prospective franchisee and the franchisor.