Incurable Breaches: A Fresh Look at an Old Problem

Rather than providing specific lists of what is deemed an incurable breach, many state relationship laws simply require "good," "just," or "reasonable" cause for unilateral termination of a franchise agreement.2 Yet, the application of such concepts to "incurable" breaches is not well-defined in the law.3 Moreover, where franchise agreements provide a list of incurable breaches, debate frequently arises as to whether that list is exclusive or whether other conduct may also be incurable (whatever that term actually means).4 Similarly, if a franchisee agreement contains a cure period but does not mention incurable breaches, debate may exist as to whether such an express cure period is the exclusive remedy of the franchisor or whether it may be cumulative and thus permit immediate termination in some situations.5 Based on all of these scenarios and the vast amount of uncertainty, franchisees and franchisors often find it difficult to properly evaluate their legal options and remedies when the claim of an "incurable breach" is made. [...]irrespective of the outcome, the multifactored analysis would lead to a deeper analysis, more well-reasoned opinions, and better predictability for the courts, franchisees and franchisors.