More on Franchise Agreement Terminations- Quite Common in Periods of Crisis Such As Now- The Spanish Supreme Court Analyzes the Circumstances Surrounding the Termination of a Franchise Agreement

8 October 2009

Any party to an agreement who does not fulfil their obligations cannot demand fulfilment by the other party.

In a recent ruling where the franchisor was shown to have failed to advertise, the Supreme Court determined that if a franchisor is the first one to breach the franchise agreement, they can neither demand fulfilment from the opposing party- the franchisee- nor terminate the agreement. The court overturned the termination of the agreement since it was said franchisor- found to be in breach- who had claimed for same.

Advertising has always been deemed a determining factor for the majority of franchises and is important in times of economic, business and financial crisis such as now, since the relationships between franchisors and franchisees become tenser than ever before due to limited resources and the consequent difficulties in fulfilling contractual obligations and services.

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