Michigan Compiled Laws

Mich. Comp. Laws § 445.1527 (2026)

Void and unenforceable provisions.

✓ current as of July 2026

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FRANCHISE INVESTMENT LAW

Act 269 of 1974

445.1527 Void and unenforceable provisions.

Sec. 27.

Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:

(a) A prohibition on the right of a franchisee to join an association of franchisees.

(b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protections provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.

(c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.

(d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (i) The term of the franchise is less than 5 years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor's intent not to renew the franchise.

(e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. This section does not require a renewal provision.

(f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.

(g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:

(i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards.

(ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.

(iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.

(iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.

(h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).

(i) A provision which permits the franchisor to directly or indirectly convey, assign, or otherwise transfer its obligations to fulfill contractual obligations to the franchisee unless provision has been made for providing the required contractual services.

History: 1974, Act 269, Eff. Oct. 15, 1974 ;-- Am. 1984, Act 92, Eff. June 20, 1984

Notes of Decisions

Cited in 21 cases (7 in the last 5 years), 1978–2025 · leading case: Dunkin' Donuts Inc. v. Taseski, 47 F. Supp. 2d 867 (E.D. Mich. 1999).

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Dunkin' Donuts Inc. v. Taseski, 47 F. Supp. 2d 867 (E.D. Mich. 1999). · cites it 7× “Laws § 445.1527 provides, in pertinent part, that the following provision! ] is void and unenforceable if contained in any documents relating to a franchise: .”

Grand Kensington, LLC v. Burger King Corp., 81 F. Supp. 2d 834 (E.D. Mich. 2000). · cites it 4× “See Mich.Comp.Laws § 445.1527; Banek Inc. v. Yogurt Ventures, U.”

Franchise Mgmt. Unlimited, Inc v. Am.’s Favorite Chicken, 561 N.W.2d 123 (Mich. Ct. App. 1997). · cites it 4× “MCL 445.1527; MSA 19.854(27). Among these void and unenforceable provisions is: A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.”

Martino v. Cottman Transmission Sys., Inc., 554 N.W.2d 17 (Mich. Ct. App. 1996). · cites it 2× “§ 445.1527; M.S.A. § 19.854(27). Included is the requirement that, at least ten business days before executing a franchise agreement, the franchisor must notify the prospective franchisee of contractual provisions which the statute renders unenforceable.”

McAlpine v. AAMCO Automatic Transmissions, Inc., 461 F. Supp. 1232 (E.D. Mich. 1978). “One of the traditional control mechanisms of a franchisor has been to keep its franchisees disorganized.”

Gen. Aviation, Inc. v. Cessna Aircraft Co., 703 F. Supp. 637 (W.D. Mich. 1988). “§ 445.1527(e), M.S.A. § 19.854(27)(e). Another statute, regulating motor vehicle dealers, distributors and manufacturers provides, in part, as follows: *647 Notwithstanding the terms, provisions, or conditions of a dealer agreement, the parties to the agreement, in performing,…”

McDonald's Corp. v. Nelson, 822 F. Supp. 597 (S.D. Iowa 1993). “(1974); Michigan Franchise Investment Law, Mich.Comp.Laws Ann. § 445.1527 (1974; am.”

Gen. Aviation, Inc. v. The Cessna Aircraft Co., 13 F.3d 178 (6th Cir. 1993). “Mich.Comp. Laws § 445.1527, Mich.Stat.Ann.”

Hambell v. Alphagraphics Franchising Inc., 779 F. Supp. 910 (E.D. Mich. 1991). “§ 445.1527(f) (emphasis added). This provision is clear and unequivocal.”

Instructional Sys., Inc. v. Comput. Curriculum Corp., 826 F. Supp. 831 (D.N.J. 1993). · cites it 2× “7-1; Mich.Comp.Laws Ann. § 445.1527; Minn.Stat.”

Banek Inc. v. Yogurt Ventures U.S.A., Inc., 6 F.3d 357 (6th Cir. 1993). “Plaintiff and amicus, Cherry Investments, argue that the choice of law provision in the agreement operates as a waiver of the rights and protections under the MFIL and thus is void under Mich.Comp.Laws Ann. § 445.1527. That section provides: Each of the following provisions is…”

CJ Consultants LLC v. Window World, Inc. (W.D. Mich. 2022). · cites it 14× “Plaintiffs bring six claims against Defendant, including: (1) breach of contract (Count I); (2) breach of implied duty of good faith and fair dealing (Count II); (3) declaratory relief (Count III); (4) trespass (Count IV); (5) violation of Section 8 of the Michigan Franchise…”

Show all 21 citing cases →

— Mich. Comp. Laws § 445.1527(b) — 2 cases

Grand Kensington, LLC v. Burger King Corp., 81 F. Supp. 2d 834 (E.D. Mich. 2000). “See Mich.Comp.Laws § 445.1527; Banek Inc. v. Yogurt Ventures, U.”

Franchise Mgmt. Unlimited, Inc v. Am.’s Favorite Chicken, 561 N.W.2d 123 (Mich. Ct. App. 1997). “MCL 445.1527; MSA 19.854(27). Among these void and unenforceable provisions is: A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.”

— Mich. Comp. Laws § 445.1527(c) — 4 cases

Dunkin' Donuts Inc. v. Taseski, 47 F. Supp. 2d 867 (E.D. Mich. 1999). “Laws § 445.1527 provides, in pertinent part, that the following provision! ] is void and unenforceable if contained in any documents relating to a franchise: .”

Clark v. Am.'s Favorite Chicken Co., 919 F. Supp. 985 (E.D. La. 1996).

CJ Consultants LLC v. Window World, Inc. (W.D. Mich. 2022). “Plaintiffs bring six claims against Defendant, including: (1) breach of contract (Count I); (2) breach of implied duty of good faith and fair dealing (Count II); (3) declaratory relief (Count III); (4) trespass (Count IV); (5) violation of Section 8 of the Michigan Franchise…”

Benjamin Franklin Franchising SPE LLC v. David Michael Plumbing, Inc. (E.D. Mich. 2024).

— Mich. Comp. Laws § 445.1527(e) — 1 case

— Mich. Comp. Laws § 445.1527(f) — 2 cases

Hambell v. Alphagraphics Franchising Inc., 779 F. Supp. 910 (E.D. Mich. 1991). “§ 445.1527(f) (emphasis added). This provision is clear and unequivocal.”

Flint Warm Air Supply Co. v. York Int'l Corp., 115 F. Supp. 2d 820 (E.D. Mich. 2000).

— Mich. Comp. Laws § 445.1527(g) — 3 cases

Oakland Fam. Restaurants, Inc. v. Am. Dairy Queen Corp. (E.D. Mich. 2024).

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