Once the decision has been reached to terminate the relationship, there is series of procedural and intellectual property protection steps which need to be taken by the parties. This may be basic in nature, such as the payment of royalties, or more complex, such as the steps which must be taken in the “deidentification” process. If the franchisee will continue its business operations at the current site, but under a different name, following the termination, then the franchisor will want to ensure that all indicia of affiliation with the franchisor’s system (e.g., signage, etc.) have been removed. A comprehensive list of the franchisee’s obligations upon termination might include some or all of the options set forth above.

27.1 Upon the termination of the Contract, irrespective of the cause, all of Franchisee’s rights pursuant to this Contract shall terminate immediately.

27.2 Franchisee shall immediately remove any material indicating a relationship with the Franchisor network from the Premises and other locations where such are used. In addition, Franchisee shall immediately cease using the System or names or trademarks that may be confused as such.

27.3 Any and all material, including the Manual, instructions, profile material, etc. shall be immediately returned to Franchisor, at no expense to Franchisor, following the termination of this Contract.

27.4 The Franchisee shall promptly pay all sums owing to the Franchisor and its subsidiaries, affiliates and suppliers.

27.5 Within 10 days of the date of the expiration or termination of this Contract, the Franchisee shall provide to the Franchisor a full stock list of the Products and the purchase price thereof. The Franchisor shall have the option (but not the obligation) to repurchase all or any part of the stocks of Products held by the Franchisee at their original purchase price or, if less, the then-current market price.

27.6 The Franchisor’s option shall be exercised by written notice no later than 10 days after the receipt of the said stock list. If the parties shall not be able to agree on the respective prices of the Products to be re-purchased within a further 10 days, the matter shall be referred for final decision by an independent appraiser. If the option is not exercised by the Franchisor, the Franchisee shall be free to on-sell the Products by way of normal retail sale and without unreasonable discounting.

27.7 Within 10 days of the date of the expiration or termination of this Contract, the Franchisee shall provide to the Franchisor a full list of the tangible assets of the Franchisee’s Business. The Franchisor shall have the option (but not the obligation) to purchase all or any part of these assets at the Franchisee’s cost, or fair market value, whichever is less. The Franchisor’s option shall be exercised by written notice no later than 10 days after the receipt of the said list. If the parties cannot agree on a price within 10 days, the matter shall be referred for final decision by an independent appraiser. If the Franchisor elects to exercise any option to purchase provided herein, it shall have the right to set off all amounts due from the Franchisee under this Contract and the cost of the appraisal, if any, against any payment therefor. If the option is not exercised by the Franchisor, the Franchisee shall be obliged to destroy the tangible assets or alter them with the result that they cannot be connected with the System.

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