54Franchisee may propose termination at any time

54 Franchisee may propose termination at any time

(1) A franchisee may, at any time, give the franchisor a written proposal for termination of their franchise agreement on the terms specified in the proposal, despite the agreement. The proposal must set out the reasons for the proposed termination. (2) If the franchisor is given a proposal under subsection (1), then, subject to subsections (3) and (4): (a) the franchisor must give the franchisee a substantive written response to the proposal within 28 days; and (b) if the franchisor’s response is to refuse to terminate, or to refuse to agree to terminate, the franchise agreement on the terms proposed—the response must include the reasons for the refusal.

Note 1: If the response is to refuse to terminate, or to refuse to agree to terminate, the franchise agreement on the terms proposed, a dispute may arise. Under section 70, the dispute can be dealt with under Division 2 of Part 5.

Note 2: Each party to a franchise agreement is under an obligation to act in good faith in relation to the agreement (see section 18).

Civil penalty: 600 penalty units.

(3) If the franchisor has given the franchisee a substantive written response to a proposal (the earlier proposal) under subsection (2), the franchisor is not required to give the franchisee another response to that proposal. (4) However, if the franchisee gives the franchisor another written proposal (the later proposal) for termination of their franchise agreement for a different reason from the reason given for the earlier proposal, the franchisor must comply with subsection (2) in relation to the later proposal. (5) This section is not intended to otherwise limit the rights or obligations of the franchisor or franchisee under a law of the Commonwealth or a State or Territory or under the franchise agreement.