Ending a Franchise in Lebanon: A Plan for De-branding and Handing Back Rights

When turning an existing business in Lebanon into a franchise, it is easy to focus on opening the outlet and overlook the day when the franchisee might leave. But the departure of an outlet trading under your name needs advance planning, not an urgent demand to take down the sign. In franchising, an orderly exit protects the brand’s reputation, both parties’ rights and customers. Before granting your first franchise, put contractual and operational arrangements in place to stop the use of the brand identity and hand back the associated rights.

Define when the right to use the brand ends

Start by distinguishing between expiry of the contract, non-renewal, termination by agreement and termination for breach. Do not assume that the same procedures or timing apply in every case. Ask a Lebanese lawyer to establish the notice requirements, any opportunities to remedy a breach, and the effective date on which the licence ends in each situation.

Lebanon has no comprehensive franchise-specific law, mandatory disclosure regime or dedicated public register of franchise agreements. The relationship is governed primarily by the Code of Obligations and Contracts, the Commercial Code and other relevant rules. Trade mark protection is governed by Decision No. 2385 of 17 January 1924, as amended. Depending on the substance of the relationship, Legislative Decree No. 34 of 1967 on commercial representation may also be relevant, making it important to assess the legal classification of the arrangement before adopting termination provisions.

Turn this review into a schedule linking each scenario to the date when use must stop, the notices required and the person responsible for implementation. If you allow a transition period, specify exactly which activities are permitted during it. Remaining stock or the settlement of accounts should not, in themselves, amount to an implied extension of permission to use the brand.

Also keep claims for outstanding payments separate from de-branding procedures. A financial dispute does not, by itself, establish whether the licence remains in force; the contract should address this point within the limits of the law.

Record every place where the brand identity appears

De-branding involves more than the shopfront. Before the outlet opens, create a register of assets and materials bearing the name or logo, then keep it updated throughout operations. This makes the exit process workable rather than leaving it to a vague phrase such as ‘restore the original condition’.

Divide the inventory into clear categories:

• Shopfronts, internal signs, distinctive décor and staff uniforms.
• Packaging, bags, printed materials, menus and invoices.
• The website, domain name, social media accounts and outlet pages.
• Map listings, ordering and delivery platforms, and ongoing advertising.
• Operations manuals, training files and confidential materials supplied to the outlet.

For each item, record who owns it, who uses it, who has authority to change it and what must happen when the relationship ends. A sign may belong to the franchisee but still need to have the branding removed; a digital account may belong to the franchisor while its day-to-day management is delegated to the outlet manager.

Do not assume that any account can be transferred automatically. Check the platform’s terms and establish recovery methods and administrative permissions from the outset. Arrange for departing employees’ access to files and systems to be revoked, while respecting record-retention and data-protection obligations. For operations manuals, specify what must be returned, what must be deleted and how completion will be evidenced, rather than requiring wholesale destruction that could conflict with a legal duty to retain records.

Deal with stock and customer orders before removing the brand identity

The contract may end while the outlet still holds branded products, paid orders and unused vouchers. Leaving these matters unresolved harms customers and may make the outlet appear to continue representing you after the relationship has ended.

Set out a contractual process for taking stock at exit, covering quantities, condition, expiry dates where applicable and purchase sources. Specify whether repurchase is an obligation or merely an option, how the price will be calculated and how transport costs will be allocated. Do not present repurchase as an automatic right unless there is a legal or contractual basis for it.

If a limited sell-off is agreed, define its duration, sales channels and the conditions for displaying the brand during that period. Distinguish between genuine products that can be sold and promotional materials or packaging that could imply continued franchisee status.

Also prepare a schedule of orders, deposits, vouchers and unresolved complaints. Identify who will fulfil orders, issue refunds and answer customer enquiries, taking account of Consumer Protection Law No. 659 of 2005 where applicable. These arrangements between the parties do not override customers’ statutory rights. Use a factual message explaining that the outlet is no longer associated with the brand and how customers can follow up on their orders, without accusations or disclosure of the dispute’s details.

Document completion in an exit report

Appoint a responsible person on each side and set separate deadlines for removing signs, updating digital channels, handing over materials and resolving outstanding orders. Link each task to evidence of completion, such as dated photographs, confirmation from a platform or a signed handover record.

Agree verification rights in advance. Do not assume that ownership of the trade mark gives you the right to enter the premises or remove equipment without consent or a legal basis. If the other party refuses to comply, follow the appropriate notice and legal procedures rather than unilaterally disabling accounts or services you have no authority to control.

Finish with a report recording completed and outstanding tasks, disputed sums and obligations that survive termination. Do not draft it as a full and final settlement if matters remain unresolved.

Practical takeaway: Before granting your first franchise, prepare a brand identity inventory, a schedule for ending its use, arrangements for stock and customers, and an exit report template for review by a Lebanese lawyer.