When a franchisee has defaulted under it franchise agreement, and the default is significant enough to merit correction (or termination of the franchise, if not corrected), it is usually necessary to give the franchisee a notice of default and an opportunity to cure. (This blog post does not relate to those defaults that are specified in the franchise agreement as being incapable of cure, for which termination may usually occur without a notice of default.)
There is no one-size-fits-all default letter. Each should be custom-made, based on the facts of the situation, the applicable provisions in the franchise agreement, and the applicable laws of the particular state. But, generally, the outline for a default letter is:
1. Description of relevant facts;
2. Summary or quote of applicable provision(s) in franchise agreement that have been violated;
3. Description of default (applying the facts to the relevant contract provisions);
4. Statement that the letter is a notice of default under franchise agreement, and description of effect (depending on nature of default) such as cure period and possible termination of the franchise agreement; and
5. Demand for cure within the cure period.
The default notice must be given/delivered in the format (usually in writing and by overnight delivery, certified mail, etc.) as specified in the franchise agreement. A default notice not given/delivered according to the requirements of the franchise agreement would probably not be effective.
It is also important to remember that, if the dispute goes to arbitration or litigation, the default letter will probably be an important exhibit.
Finally, always check state franchise laws before sending a default letter. There may be important restrictions or requirements, such as mandatory notice and cure periods longer than stated in the franchise agreement, and limitations on the permissible grounds for terminating a franchise agreement.