Franchise relationship laws: the 2026 state tracker

Franchise relationship laws at a glance: 19 laws, one common core

Good cause is the shared core of franchise relationship laws; almost everything else differs. Of the 19 jurisdictions with a general law (18 states and Puerto Rico), 16 require good, reasonable or just cause before a franchisor terminates. Two (Mississippi and Missouri) require only notice. Rhode Island’s Fair Dealership Act sets notice and cure periods and defines good cause, but the text we read has no express ban on terminating without it, so the row says ‘see statute’.

Beyond cause, coverage thins quickly. 18 of the 19 regulate nonrenewal, 12 fix a minimum notice period, 10 give a statutory right to cure, 10 require repurchase or compensation in some cases, 8 limit transfer refusals, 7 void out-of-state venue clauses by statute and 6 void choice-of-law clauses. No two laws match on all eight.

These are different laws from the 14 franchise registration states, which regulate the sale of a franchise. 10 states have both kinds; Arkansas, Connecticut, Delaware, Iowa, Mississippi, Missouri, Nebraska and New Jersey have only a relationship law. Industry laws for car dealers, fuel stations (the federal PMPA), beer and spirits distributors and equipment dealers exist in nearly every state and are outside this tracker.

Termination notice and cure periods compared

Notice periods cluster at two numbers and cure rights are the least common protection. Where a statute fixes notice, it is 60 days (California, Connecticut, Nebraska, New Jersey, Rhode Island) or 90 days (Arkansas, Delaware, Indiana, Minnesota, Mississippi, Missouri, Wisconsin); the median of the 12 fixed periods is 90 days. Seven jurisdictions require notice without a number (Hawaii, Illinois, Iowa, Michigan, Virginia, Washington, Puerto Rico).

Only 10 laws give a statutory chance to cure. The floor is 60 days in California, Minnesota and Wisconsin and 30 days in Arkansas, Iowa and Rhode Island. Illinois, Michigan and Washington say the cure period ‘need not’ exceed 30 days, which caps rather than guarantees it, and Hawaii says only ‘a reasonable period of time’. Indiana’s 90 days applies ‘unless otherwise provided in the agreement’ (23-2-2.7-3), so a contract can shorten it.

Almost every law lets the franchisor end the relationship at once, without notice or cure, for listed events: abandonment, bankruptcy or insolvency, a felony tied to the business, or repeated defaults. Iowa allows termination without cure when the franchisee repeatedly fails to comply with material provisions (537A.10(7)(c)(6)); Washington after three willful breaches of the same term (19.100.180(2)(j)); Rhode Island limits cures to three in 12 months (6-50-4).

Nonrenewal, transfer and buyback rules

Nonrenewal rules are nearly universal among the 19, but they protect in different ways: some require cause, some require long notice, and some require money. Arkansas, Connecticut, Delaware, Hawaii, Nebraska, New Jersey, Wisconsin and Puerto Rico apply the same cause standard to nonrenewal as to termination. California and Minnesota require 180 days notice plus conditions; Iowa requires 6 months notice plus good cause, mutual agreement or a full market withdrawal. Illinois, Michigan and Washington instead require compensation when the franchisee is barred from competing or gets too little notice (6 months in Illinois and Michigan; 1 year in Washington to avoid paying for goodwill).

Transfer rules are rarer: 8 jurisdictions limit a franchisor’s refusal. California makes it unlawful to block a sale to a buyer who meets the franchisor’s then-existing standards (20028). Arkansas, Hawaii, Iowa, Nebraska and New Jersey deem a transfer approved if the franchisor does not answer within 30 or 60 days. Arkansas exempts transfers to a qualified spouse, child or heir from approval (4-72-205(d)). For what franchisors charge on a transfer, see our franchise transfer fees report.

Ten laws require repurchase or compensation in some cases. California’s buyback of inventory and equipment at price paid less depreciation (20022) is the broadest; Rhode Island and Wisconsin cover only inventory marked with the grantor’s name. Puerto Rico’s Law 75 sets an indemnity that counts investment, unsold stock and goodwill when there is no just cause (Art. 3).

Venue and choice-of-law clauses: where the statute overrides the contract

Most franchise agreements name the franchisor’s home state for lawsuits and governing law; nine jurisdictions limit that. By statute, California (20040.5), Illinois (705/4), Indiana (23-2-2.7-1(10)), Iowa (537A.10(3)), Michigan (445.1527(f)) and Puerto Rico (Law 75, Art. 3B) void out-of-state venue or forum clauses, and Rhode Island does so for Franchise Investment Act claims (19-28.1-14). Minnesota’s rule 2860.4400 J and Maryland’s COMAR 02.02.08.16L reach a similar result by regulation, Maryland only for Maryland Franchise Law claims.

Six jurisdictions void choice-of-law clauses that displace the local statute: Arkansas, Iowa, Minnesota, Rhode Island (Franchise Investment Act claims), Washington and Puerto Rico. Others rely on anti-waiver language. Illinois expressly allows out-of-state arbitration clauses, and Michigan lets the parties agree to arbitrate elsewhere at the time of the dispute, so a venue rule does not always keep a dispute local.

How these clauses play out in court is outside this tracker; our franchise litigation report counts federal franchise cases, and our franchise agreement terms study shows which venue and governing law FDDs actually choose.

Where franchisees are covered: franchise relationship laws by share of franchise activity

The 18 states with a general law hold a minority of US franchise activity: about 38.5% on two different Census measures. In the 2024 Annual Business Survey (data year 2023), those states account for 38.5% of state-counted franchise firms and 37.0% of franchise-firm employees. In the 2017 Economic Census, the latest with franchise detail by state, they hold 38.5% of franchise restaurant establishments.

The other 61.5% of franchise restaurant locations, and 61.5% of state-counted franchise firms, are in 32 states and DC where the franchise agreement, not a statute, sets the termination terms. The 15 states that require cause hold 35.9% of state-counted franchise firms.

Both measures are imperfect. The ABS counts firms, and a multi-state firm is counted in each state where it operates; it does not split franchisees from franchisors. The Economic Census has state rows only for restaurants, and 2017 is its latest franchise tabulation. Puerto Rico is in neither file. State-level franchise counts are in our franchise statistics by state report.

How FDD state addenda reflect franchise relationship laws

State addenda in franchise disclosure documents follow registration laws far more than relationship laws. We scanned 259 FDDs (the latest Minnesota filing for each brand in the site’s sample, issued 2025-01-24 to 2026-08-18) for addendum or rider headings that name a state, and for citations of each relationship statute.

Every state with both a registration and a relationship law got a labelled addendum in at least 87 FDDs (Michigan) and up to 220 (Minnesota). The eight relationship-only states got almost none: Connecticut 20, Delaware 2, Iowa 2, Missouri 1, and Arkansas, Mississippi, Nebraska and New Jersey none. New Jersey’s Franchise Practices Act is cited in 13 FDDs (5.0%), against 255 (98.5%) for Minnesota’s rules.

Where relationship-only states appear, it is often in an older multi-state paragraph (‘these states have statutes which may supersede the franchise agreement’). 11 FDDs (4.2%) carry it; 6 cite Arkansas as ‘Section 70-807’ and 6 cite Michigan as ‘Section 19.854(27)’, numbering that predates the current codes. A buyer in a relationship-only state should not expect the FDD to explain local protections. The heading count is a lower bound: against a manual reading of the same FDDs for Minnesota pages, it finds 86.3%.

What changed from 2024 to 2026, and what is pending

The laws are old and stable. The history notes we could read show no 2024 to 2026 amendment to any termination, notice or renewal section among the 19 laws; the newest changes in force are California’s AB 676 (effective 2023-01-01) and Arkansas Act 847 of 2023. Hawaii’s section dates from 1978, Michigan’s from 1984 and Minnesota’s from 1989.

The live activity is at the edges. Maryland’s Chapter 414 of 2026 took effect on 2026-10-01 and adds a right for franchisees to join an association of the same brand’s franchisees (Bus. Reg. 14-233); it does not add good cause or notice rules. New York’s S3643 (2025-2026) would add good cause for termination and nonrenewal and limits on transfer refusals; it was in the Senate Consumer Protection Committee when checked. Arkansas HB1177 died in committee on 2025-05-05.

How we checked every state, and the update log

Statutes. Each cell was read from statute text saved on 2026-10-08 (UTC), from the official legislature or government site where it loaded (via a US proxy for Hawaii, Illinois, Michigan, Nebraska, Rhode Island and Wisconsin). Arkansas, Mississippi and New Jersey publish their codes through a commercial host; Justia returned HTTP 403 and Cornell LII does not host these codes, so we read FindLaw’s copies and say so in each row.

States with no law. Two Google searches per jurisdiction against the Justia code mirror (franchise termination ‘good cause’; franchise or dealership ‘notice’ ‘cure’) produced leads that we classified by chapter subject, opening the official page where the subject was unclear. Every lead outside the 19 laws was an industry law. We cross-checked against a 2023 Kilpatrick Townsend survey and two competing pages; where they disagreed with statute text (Tennessee, Virginia), the statute wins.

Hand-check. A second reader re-read 10 randomly drawn jurisdictions (California, Connecticut, Delaware, Hawaii, Iowa, Minnesota, Missouri, New Jersey, Rhode Island, Wisconsin) from the saved text without seeing our registry. Of 90 cells, 3 were wrong or overstated (3.3%): the New Jersey choice-of-law cell and the Rhode Island venue and choice-of-law cells. All are corrected.

Update log. 2026-10-08: first edition, 52 jurisdictions. Checked monthly.