Agreements & law

Renewal

Renewal is the process of continuing or extending a franchise agreement at the end of its term, for which the Franchising Code requires the franchisor to give advance notice of its intentions and, unless the franchisee validly opts out, to provide updated disclosure.

What it means

A franchise agreement runs for a fixed term, and renewal (or extension) determines whether the franchisee can keep operating beyond it. Whether a franchisee has a right to renew depends on the agreement: some grant renewal options, others leave it to the franchisor's discretion. The Code does not force a franchisor to renew, but it regulates the process and timing so the franchisee has certainty and information.

The franchisor must tell the franchisee, in writing, whether it intends to renew or extend at least six months before the end of the term (or at least one month before, if the term is less than six months). If a new or extended agreement is proposed, the franchisee is generally entitled to a current disclosure document and, in effect, the protections that apply to entering an agreement, including a consideration period.

Where the renewed or extended agreement is with the same franchisor and is substantially the same business and terms, the franchisee can choose to opt out of receiving a fresh disclosure document and copy of the Code by giving written notice. The 2025 Code also links renewal to restraint of trade: if a franchisor refuses a renewal on substantially similar terms, a post-term restraint may become unenforceable.

In practice

Franchisees should track their end-of-term date and watch for the franchisor's six-month notice, because renewal is a natural point to reassess the business, renegotiate where possible, and confirm the lease aligns with the franchise term. Requesting and reviewing an updated disclosure document at renewal is worthwhile even if entitled to opt out, since the network may have changed materially since the original purchase.

For franchisors, giving timely and clear end-of-term notice is a Code obligation, and a decision not to renew needs to be made carefully given the good-faith duty and the 2025 restraint consequences. Both sides benefit from starting renewal discussions well before the deadline so lease, refit and financing arrangements can be settled in time.

A real example

A retail franchisee is nearing the end of a five-year term. Eight months out, the franchisor confirms in writing that it will offer a renewal on substantially the same terms. Because the business and terms are substantially the same and the franchisor is the same, the franchisee gives written notice opting out of a fresh disclosure document, and the parties sign the renewal, aligning it with a matching five-year lease extension.

Renewal — FAQs

Am I entitled to renew my franchise?

Only if your agreement gives you a renewal right. The Code does not guarantee renewal, but it requires the franchisor to notify you of its intentions in advance.

When must the franchisor tell me if it will renew?

At least six months before the end of the term, or at least one month before if the term is shorter than six months.

Do I get a new disclosure document at renewal?

Generally yes, unless the renewal is substantially the same business and terms with the same franchisor and you give written notice to opt out.

What if the franchisor refuses to renew?

It may be entitled to, subject to the agreement and its good-faith duty, but refusing a renewal on substantially similar terms can make a post-term restraint of trade unenforceable under the 2025 Code.

See the full franchise glossary, the Fee Index or our buyer guides.