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Brand Identity and Termination for Just Cause in Franchise Agreements

Franchise Sözleşmelerinde Marka Kimliği ve Haklı Fesih
Authors
Uğurcan TekinBeyza ErdemirUğurcan Tekin · Beyza Erdemir
Published28 October 2026
Reading time24 min
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CategoryFranchise & Distribution
Published28 October 2026
Authors
Uğurcan TekinPartner
Beyza ErdemirAttorney at Law
In this article
Franchise agreementsTermination for just causeBrand identityAssembly of Civil Chambers
Contents01The Legal Nature of the Franchise Agreement and the Principal Obligations02System Integrity, Brand Identity and Staff Uniforms03Termination and Termination for Just Cause04The Decision of the Assembly: Facts and Procedural History05The Principles Established by the Decision06Assessment and Practical Implications07Conclusion
Decisions citedYargıtay HGK, 15.04.2026, E. 2025/351, K. 2026/249 · Yargıtay 11. HD, 20.04.2022, E. 2020/6079, K. 2022/3196
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SummaryÖzet

This article has been prepared with a view to examining, in the light of the decision of the Assembly of Civil Chambers of the Court of Cassation dated 15 April 2026 (E. 2025/351, K. 2026/249), whether a franchisee's failure to comply with instructions on corporate staff uniforms constitutes just cause for termination by the franchisor. The article first addresses the legal nature of the franchise agreement and the franchisee's duties to follow instructions and to submit to inspection, and then examines staff uniforms as part of brand identity, the concept of termination for just cause and the effect of a justified or wrongful termination on the parties' claims; finally, it assesses the practical implications of the decision for evidence, contract drafting and the competent court.

Key takeaway · Kilit sonuç

In a case where the uniform rule was expressly set out in the agreement, the breach was documented by inspection reports and a notarial determination and continued despite a formal notice, the Assembly of Civil Chambers held the franchisor's termination justified and accepted that the franchisee's action ought to be dismissed.

DateEventCourt and fileNature
22.06.2011Franchise agreementtwo restaurants, October 2011Event
05.03.2012 · 07.05.2012Notice, notarial record, terminationsee Section 04Event
2013Action broughtHatay 1st Civil Court · E. 2013/96Event
28.01.2015Lack of jurisdictionHatay 1st Civil CourtProcedural decision
11.01.2016Reversed on jurisdiction11th Civil Chamber · E. 2015/14146Procedural decision
13.03.2020Wrongful; action partly allowedHatay 1st Civil Court · E. 2016/150In the franchisee's favour
20.04.2022Justified; reversed for franchisor11th Civil Chamber · E. 2020/6079In the franchisor's favour
26.01.2023First decision of insistenceHatay 1st Civil Court · E. 2022/345In the franchisee's favour
29.05.2024 · 07.11.2024Procedural reversal; insistence againAssembly · E. 2024/11-178Procedural decision
15.04.2026Justified; reversed with final effectAssembly · E. 2025/351In the franchisor's favour
Table: A fifteen-year dispute: from the agreement to the decision of the Assembly (proceedings: thirteen years)

In an increasingly global commercial world, traditional business structures have largely given way to modern marketing and distribution networks. The franchise system, one of the important building blocks of this transformation, enables the franchisor to bring its proven business model, accumulated know-how, registered trade mark and corporate identity elements to a wide public through independent traders, within the framework of a defined organisational standard.

The commercial success of the franchise system rests on strict uniformity being maintained in every independent business operating within it. The customer's belief that, whichever outlet operating under a given brand they visit, they will receive service of the same quality, hygiene, concept and standard forms the economic foundation of the system. This corporate integrity and consumer confidence are established through wide-ranging instructions extending from menu recipes and business equipment to packaging and the uniform, logo-bearing corporate clothing worn by service staff.

In practice, however, franchisees acting in their own name and for their own account as independent traders are seen to resist the franchisor's corporate standards, visual concept or instructions on staff clothing by invoking their operational independence. Whether such breaches amount to a simple breach of contract or, by undermining the relationship of trust underlying a continuing obligation, permit termination of the agreement for just cause is a matter of debate in practice.

This article examines the legal nature of the franchise agreement, the franchisee's duties to follow instructions and to submit to inspection, and the consequences, for the purposes of termination for just cause, of a breach of staff uniform standards forming an integral part of brand identity, in the light of legal scholarship and case law and within the framework of the decision of the Assembly of Civil Chambers of the Court of Cassation (the “Assembly”) dated 15 April 2026, E. 2025/351, K. 2026/249 (the “Decision”).

01
The Legal Nature of the Franchise Agreement and the Principal ObligationsFranchise Sözleşmesinin Hukuki Niteliği ve Asli Borçlar
Definition, Elements and Legal NatureTanım, Unsurlar ve Hukuki Mahiyet

Although the franchise agreement is not defined in Turkish legislation, numerous definitions have been offered in legal scholarship and case law (Aksu, pp. 303-304). According to one scholarly definition, a franchise agreement is the grant by the franchisor to the franchisee of a right to use intangible rights owned by the franchisor, such as production, operation and marketing rights (Gürzumar, p. 10, cited in Aksu, p. 303). According to another, it is an agreement concerning the marketing and distribution of goods or services under which the use of intangible rights is granted to the franchisee in return for a fee (Kırca, pp. 19-20, cited in Aksu, p. 304; for the same definition, see the Decision, para. 16).

The franchise agreement is characterised as a framework agreement between two parties, the franchisor and the franchisee, which imposes obligations on both sides, gives rise to a continuing obligation and determines individual transactions; its character as a framework agreement is, however, disputed in legal scholarship (Assembly of Civil Chambers, 16.05.2019, E. 2017/11-60, K. 2019/579; Saral, pp. 32-34; Aksu, pp. 303-304). Under the definition in Article 3(b) of the Competition Board's repealed Block Exemption Communiqué No. 1998/7 on Franchise Agreements, the use of a common trade mark or business name and the uniform appearance of premises, the transfer of know-how and continuing support to the franchisee throughout the term of the agreement form the core elements of this agreement (Saral, p. 16; the Decision, para. 18). The Communiqué was repealed by Communiqué No. 2002/2 on vertical agreements (the Decision, para. 19).

PerformanceFrom whom to whom
Use of the trade mark and business nameFrom the franchisor to the franchisee
Transfer of know-howFrom the franchisor to the franchisee
Continuous commercial and technical supportFrom the franchisor to the franchisee
Instructions and system standardsFrom the franchisor to the franchisee
Franchise feeFrom the franchisee to the franchisor
Compliance with instructionsFrom the franchisee to the franchisor
Submission to inspectionFrom the franchisee to the franchisor
Table: The structure of the franchise relationship: reciprocal performance and the system the consumer sees. Framework agreement · continuing obligation · mixed or sui generis character. The franchisor is the owner of the brand and system, gives instructions and inspects; the franchisee is an independent trader acting in its own name and for its own account. What the consumer sees: the same brand, appearance and standard at every outlet. Schematic; obligations taken from para. 16 of the Decision and Art. 3(b) of repealed Communiqué No. 1998/7.

Not being directly regulated in the Turkish Code of Obligations No. 6098 or the Turkish Commercial Code No. 6102 (“TCC”), the franchise agreement falls among contracts not regulated by statute (innominate contracts). In legal scholarship and case law it is mostly characterised either as a contract of its own kind or as a mixed contract combining elements of sale, service, mandate, agency, lease of productive property, licence and know-how. Accordingly, in disputes between the parties the provisions of the agreement apply first; where there is a gap, the rules of the contract type to which the dispute relates are applied with due regard to the principle of good faith and, where necessary, Article 1 of the Turkish Civil Code No. 4721 (“Civil Code”) is applied (the Decision, paras. 20-21).

The Duty to Follow Instructions and to Submit to InspectionTalimatlara Uyma ve Denetime Katlanma Borcu

In a franchise relationship the franchisee acts in its own name and for its own account as a legally and financially independent undertaking. This commercial independence does not mean unlimited freedom in the operation of the business. The common trade mark, emblem and business concept, which create the perception among consumers that the outlets are parts of the same business, make it necessary to apply the rules laid down by the franchisor (the Decision, paras. 22-23).

The franchisor's power to give instructions serves the purpose of preserving the uniformity of the system and offering consumers the same assurance of taste, quality and hygiene at every outlet. Instructions may extend from the recipes for preparing products and the decoration of the premises to packaging materials and the hygiene and clothing standards of the staff employed at the business (the Decision, para. 24).

As a natural extension of the duty to follow instructions, the franchisee is under an obligation to submit to the franchisor's inspections. A franchisee which has accepted these rules by joining the system and then obstructs inspections or renders them ineffective acts inconsistently with the principle of good faith under Article 2 of the Civil Code and with its duty of loyalty (the Decision, para. 25).

In the DecisionKararda

The Assembly defined instructions as rules laid down in order to integrate the franchisee into the system and to ensure that it appears on the market with a single image, and held that “the franchisee's conduct in conformity with these standards is one of the essential elements of the contractual relationship.” (the Decision, para. 23)

02
System Integrity, Brand Identity and Staff UniformsSistem Bütünlüğü, Marka Kimliği ve Personel Kıyafeti
Visual Standards and Brand IntegrityMarka Bütünlüğü Bakımından Görsel Standartlar

The clothing of staff working at franchised outlets is part of brand identity and goes beyond a matter of internal business preference. Alongside the registered word mark and logo, a brand is a corporate identity as a whole, given concrete form at every point of contact with the consumer, such as packaging, style of service, store atmosphere and the appearance of staff.

The use by staff of the uniform logo-bearing T-shirts, aprons and accessories determined by the franchisor performs a function in three respects:

  • establishing consumer confidence in the system and in the service offered,
  • reinforcing the perception of hygiene, order and corporate quality in the products and services offered,
  • showing the outside world that the business is an authorised and inspected part of the distribution network (the Decision, paras. 23-24).
Appearance encountered in the caseAssessmentBasis
Agreed uniformClothing obtained from the franchisorArt. 5/7
Logo T-shirt printed elsewhereLogo T-shirt not supplied by the franchisorformal notice, 05.03.2012
Plain clothesPlain clothing without the logonotice of termination, 07.05.2012
Table: Staff uniforms: the agreed appearance and the breaches found in the case. Notarial determination of the Hatay 5th Notary, 30 April 2012: the clothing of six staff members was photographed and recorded. Forms of breach taken from paras. 40 and 41 of the Decision.

Where the franchisee avoids obtaining, against payment, the standard clothing agreed in the contract and has staff work in plain clothes or in items printed elsewhere without authorisation, this weakens the distinctiveness of the brand and undermines its corporate credibility in the eyes of consumers.

Erosion of Trust and Its Effect on TerminationGüven İlişkisinin Sarsılması ve Feshe Etkisi

For the franchisor, the principal risk in protecting the system is the presence of franchisees that fail to comply with standards and resist inspections. The Assembly described this risk as the franchisee's capacity to resist instructions and inspections, influenced also by the fact that it is not dependent in the way a salaried employee is; it stated that discord between the parties may disrupt uniformity, will adversely affect brand value by damaging the brand's reputation in the eyes of consumers, and is of a nature and force capable of leading to the termination of the contractual relationship (the Decision, para. 26). A loss of quality or appearance at one outlet can turn into a loss of reputation affecting the brand's entire network.

A high level of mutual trust between the parties is fundamental to continuing obligations. Persisting in not wearing corporate staff clothing despite written warnings and notices served through a notary may create an objective basis on which, under the principle of good faith, the franchisor cannot be expected to continue the contractual relationship.

In plain termsSade anlatımla

The franchisee owns its business, but the sign above the door carries someone else's brand. For the customer, every outlet is the same brand. Where the agreement regulates what staff wear, the matter is therefore not regarded as left to the franchisee's own discretion.

03
Termination and Termination for Just CauseSona Erme ve Haklı Nedenle Fesih
The Concept and Scope of Termination for Just CauseHaklı Fesih Kavramı ve Kapsamı

A franchise agreement may end in the ordinary way on expiry of its term or by agreement of the parties, and it may also be terminated by a unilateral declaration of intent by one of the parties. In continuing obligations, termination as a rule takes effect for the future and in this respect differs from rescission, which has retroactive effect (the Decision, paras. 27-28).

Termination for just cause (extraordinary termination) is an exceptional remedy available where significant reasons arising after the conclusion of the agreement make the continuation of the obligation intolerable for one of the parties under the principle of good faith. Whether the agreement is for a fixed or an indefinite term, the parties may terminate it with immediate effect where just cause exists (the Decision, paras. 30-31).

Not every breach of contract directly gives rise to a right of termination for just cause. Extraordinary termination requires the breach to be serious and significant enough to destroy the relationship of trust between the parties, and the intolerability to arise objectively under the principle of good faith (Gürzumar, pp. 172-173, cited in the Decision, para. 33). Even where the agreement lists certain breaches as grounds for termination for just cause, the judge assesses whether the alleged breach has made the continuation of the agreement intolerable in the specific case (the Decision, para. 34).

Financial Consequences of Justified and Wrongful TerminationHaklı ve Haksız Feshin Maddi Sonuçları

Whether the termination is justified determines the fate of the receivables and damages claims the parties may raise in the winding-up (the Decision, para. 32). If the termination is wrongful, the franchisee whose agreement has been wrongfully terminated may claim, as expectation damages, the part of the franchise fee paid under a fixed-term agreement attributable to the remaining term, its losses arising from furnishing and equipment expenditure and its lost profit.

In determining the amount recoverable for wrongful termination, the entire remaining term of the agreement is not taken as the basis in every case. In its decision dated 16 March 2023, E. 2021/7358, K. 2023/1618, the 11th Civil Chamber of the Court of Cassation reversed the judgment, holding that a franchisor's claim for franchise fees for the remaining term should be based on the reasonable period within which a similar agreement could be concluded and that a calculation based on the period from the termination date to the end of the agreement was erroneous.

Franchisee's claimsWrongful terminationTermination for just cause (franchisee at fault)
Franchise or entry feeRecoverable: the part attributable to the remaining termNot heard (the Decision, para. 47)
Furnishing and equipment lossRecoverable: as expectation damagesNot heard (the Decision, para. 47)
Lost profitRecoverable: as expectation damagesNot heard (the Decision, para. 47)
Indemnity claimConditional: Art. 122(5) TCC by analogyNot heard (Art. 122(3) TCC)
Current account up to terminationRecoverable: irrespective of the nature of the terminationRecoverable (the Decision, para. 47)
Table: Wrongful or justified termination: the fate of each head of claim. The table is drawn up from the franchisee's perspective; the just cause column shows the case where the franchisee's fault led to termination. For the franchisor's claim for the remaining term, a reasonable period is taken as the basis: 11th Civil Chamber · 16.03.2023 · E. 2021/7358.

Where the termination rests on just cause, the picture is reversed:

  • A party whose fault caused the agreement to be terminated for just cause cannot claim damages linked to the termination, such as lost profit and loss in value of equipment.
  • A claim for the return of the entry or franchise fee, which depends on the termination being wrongful, also falls within this scope. The Assembly stated that, once it is established that the termination rests on just cause, “receivables claims that can be heard only on condition that the termination is wrongful” cannot be accepted (the Decision, para. 47). In our assessment, this outcome is also supported by the fact that the entry fee is consideration for joining the system and for the use of know-how and the trade mark; however, the fate of this fee may be debated separately where the agreement ends after a very short period.
  • Irrespective of whether the termination is justified, the parties remain liable for their debts arising from the current account relationship up to the date of termination (the Decision, para. 47).
  • An indemnity claim that the franchisee may raise on the ground that it contributed to the value of the brand and to the customer base during the term of the agreement is also linked to whether the termination is justified. If Article 122 of the TCC on agency agreements is applied to franchise agreements by analogy, the indemnity claim of a franchisee whose fault led to termination for just cause will not be heard either.
Statutory provisionKanundaki düzenleme

Under Article 122(3) of the TCC, the agent has no right to claim an indemnity where the principal has terminated the agreement for just cause owing to the agent's fault. Under paragraph 5 of the same Article, the Article also applies, unless this would be inequitable, on the termination of similar continuing contractual relationships granting exclusive rights.

04
The Decision of the Assembly: Facts and Procedural HistoryHukuk Genel Kurulu Kararı: Olay ve Yargılama Süreci
The Parties and the AgreementTaraflar ve Sözleşme

A franchise agreement was signed on 22 June 2011 between the claimant franchisee and the defendant franchisor. From October 2011 the claimant began operating two separate restaurants under the defendant's trade mark (the Decision, paras. 4 and 38).

Article 5 of the agreement provided that the franchisee would ensure that staff were clean, well-groomed and tidy by using the staff clothing to be obtained from the franchisor against payment (Art. 5/7), that the franchisor would at all times have the right to inspect through the inspectors it appointed (Art. 5/11) and that failure to comply with the provisions of the agreement would in itself give rise to a right of termination (Art. 5/15); Article 6 provided that the agreement would be terminated unilaterally by the franchisor if the obligations were not complied with or if measures were not taken within three days despite a formal notice (the Decision, paras. 10 and 36-37). The agreement was concluded for an indefinite term, to remain in force for as long as its provisions were complied with (the Decision, para. 43).

The Termination ProcessFesih Süreci

Disputes arose between the parties shortly after the commercial relationship began. In the store inspection form dated 20 January 2012, the question whether staff had the uniform clothing was marked “No”, and the form was also signed by the store's managers. By a formal notice dated 5 March 2012, the defendant stated that the logo T-shirts worn by employees were not those supplied by it and required the breach to be remedied within three days. The inspection of 28 April 2012 found that the breach was continuing, but this time the claimant's side refused to sign the report. On 30 April 2012 the defendant had a determination made at the premises through the Hatay 5th Notary; the notarial report recorded, with photographs, the clothing worn by six members of staff. The agreement was terminated by a notice of termination dated 7 May 2012 (the Decision, paras. 10, 38 and 41).

The chain of evidence that sustained the terminationFeshi ayakta tutan delil zinciri
0120.01.2012 · Inspection form: the clothing question was marked “No”; the form was also signed by the store managers.
0205.03.2012 · Formal notice (45 days later): the logo T-shirts had not been supplied by the franchisor; three days were given to remedy the breach.
0328.04.2012 · Second inspection (54 days later): the breach was continuing; the opposing party refused to sign.
0430.04.2012 · Notarial record (2 days later): Hatay 5th Notary; six staff members photographed.
0507.05.2012 · Notice of termination (7 days later): several grounds of termination; the uniform ground before the Assembly.
Contractual basisSözleşmesel dayanak

Art. 5/7 clothing obligation · Art. 5/11 right of inspection · Art. 5/15 breach gives rise to a right of termination · Art. 6 formal notice and three days

First-instance court · 13.03.2020Assembly of Civil Chambers · 15.04.2026
Inspection forms unilateral, not capable of proofBurden of proof on the terminating party; discharged meticulously
Inspection to be carried out by an independent inspectorInspection is the franchisor's natural power
No new inspection after the deadlineBreach established through a notarial determination and a formal notice
Table: Dates taken from paras. 10, 38 and 41 of the Decision.

The notice of termination relied on several grounds, such as product quality, hygiene, service standards and the use of goods from other suppliers. The dispute before the Assembly, however, was confined to the ground relating to staff clothing on which the Chamber's reversal decision was based (the Decision, paras. 39-40).

The Claims and the ProceedingsTalepler ve Yargılama Süreci

In the action it brought before the Hatay 1st Civil Court of First Instance (sitting as a Commercial Court), the claimant alleged that the termination was wrongful and claimed pecuniary and non-pecuniary damages. The heads of claim and the outcome of the first-instance and appellate decisions on each of them are shown in the table below.

ClaimAmountFirst instance, 13.03.202011th Chamber and Assembly
Franchise fee paidTRY 100,000.00TRY 80,000.00 awardedReversed: claim to be dismissed
Loss in value from disposal of equipment below valueTRY 10,000.00TRY 32,294.06 awarded for both heads togetherReversed: claim to be dismissed
Furnishing of the outletsTRY 50,000.00Together with the previous rowReversed: claim to be dismissed
Lost profitTRY 50,000.00Not awardedDismissal
Products left on hand at terminationTRY 2,500.00Not awardedDismissal
Contribution to brand value and customer numbersTRY 5,000.00Not awardedDismissal
Price difference on invoices paid under reservationTRY 9,630.00AwardedReversed: claim to be dismissed; the dissent concerned this head
Non-pecuniary damagesTRY 50,000.00DismissedClaimant's appeal held unfounded
Table: Heads of claim and outcomes (the Decision, paras. 4, 8, 10 and 47-49)

The court initially declined jurisdiction by its decision of 28 January 2015, on the ground that the dispute arose from intellectual and industrial property rights. By its decision dated 11 January 2016, E. 2015/14146, K. 2016/78, the 11th Civil Chamber of the Court of Cassation reversed that decision, stating that the claim did not concern an industrial property right registered under Decree-Law No. 556 (the Decision, paras. 6-7).

In the proceedings conducted in compliance with the reversal, by its decision dated 13 March 2020, E. 2016/150, K. 2020/73, the court held that the termination was wrongful and partly allowed the action, on the grounds that the store inspection forms kept by the defendant had been drawn up unilaterally and were not capable of proof, that under the agreement inspection had to be carried out by an inspector, that even if there was a breach no new inspection had been carried out after time had been granted, and that the alleged grounds of termination did not impair the essential elements of the agreement (the Decision, paras. 8 and 42).

By its decision dated 20 April 2022, E. 2020/6079, K. 2022/3196, the 11th Civil Chamber held the claimant's grounds of appeal unfounded and reversed the judgment in favour of the defendant, stating, on the basis of the provisions of the agreement, the formal notice, the inspection forms and the determination report of the Hatay 5th Notary dated 30 April 2012, that the claimant had failed to perform its clothing obligation despite warnings and determinations and that the termination therefore rested on just cause (the Decision, para. 10).

The court insisted on its judgment by a decision of 26 January 2023; that decision was reversed on procedural grounds by the Assembly's decision dated 29 May 2024, E. 2024/11-178, K. 2024/307, on the ground that a decision of insistence had not been rendered in due form. By its decision dated 7 November 2024, E. 2024/109, K. 2024/288, the court insisted again. By the Decision of 15 April 2026, the Assembly reversed the decision of insistence by a majority and with final effect. The difference of opinion within the Assembly arose in respect of the claim concerning invoices paid under reservation; the Assembly agreed with the Chamber that the termination rested on just cause (the Decision, paras. 11-12, 45 and 50).

05
The Principles Established by the DecisionKararın Ortaya Koyduğu İlkeler
The Essential Nature of the Staff Uniform ObligationPersonel Kıyafeti Yükümlülüğünün Asli Niteliği

According to the Assembly, the franchisee's conduct in conformity with the system's standards is one of the essential elements of the contractual relationship, and what the persons working at the business are to wear may also be an element of the franchise agreement (the Decision, paras. 23-24). The Assembly found that it is “natural” for a franchisor that regards the provision of service with the same standard appearance and quality at every outlet as an essential element of the agreement “not to allow” these rules “to be relaxed”.

In the DecisionKararda

“Since the defendant sought to increase both the recognition and the value of the brand by attaching particular importance to the uniformity of the clothing of staff working at all businesses within the franchise system and thereby keeping the visible face of the brand at a certain standard, its termination of the franchise relationship where the contrary practice was continued in a manner shaking the relationship of trust between the parties is, in the specific case, sufficient to accept that the agreement was terminated for just cause.” (the Decision, para. 44)

The Scope of the Right of Inspection and ProofDenetim Hakkının Kapsamı ve İspat

The first-instance court's interpretation that inspection had to be carried out by independent inspectors was not adopted by the Assembly. According to the Assembly, the words “with the inspectors it appointed” in the agreement, read in the light of the agreement as a whole, do not mean that inspection is to be carried out by a third person independent of the parties; even in the absence of a provision to that effect in the agreement, the franchisor has the right to inspect whether the system is operating in accordance with the agreement (the Decision, para. 43).

The Assembly also stated that the burden of proof lies on the party terminating the agreement and noted that the defendant had acted meticulously in discharging that burden. The defendant had not contented itself with two inspection reports, one also signed by the store's managers and the other which the opposing party refused to sign; it had the actual situation recorded with photographs through a notary and, by serving a formal notice, gave the franchisee the opportunity to remedy the breach. The Assembly accepted that this evidence established that the staff did not wear the required clothing (the Decision, paras. 41 and 43).

Invoices Paid Under Reservationİhtirazi Kayıtla Ödenen Faturalar
In the DecisionKararda

“Since it is established that the termination rests on just cause, there is no doubt that receivables claims that can be heard only on condition that the termination is wrongful cannot be accepted. Nevertheless, the parties are of course liable, irrespective of whether the termination is justified, for their debts arising from the current account relationship between them in the period until the termination takes place.” (the Decision, para. 47)

With regard to the price difference claim, which was debated in the Assembly and allowed by the first-instance court, the Decision contains the following findings:

  • The claimant alleged that the defendant had made excessive price increases in order to force it into termination. The panel of experts, also taking chamber of commerce data into account, opined that the price difference was at a level that could be regarded as reasonable; the Assembly stated that the file contained “no finding or assessment” that the defendant had prepared the ground for termination in bad faith through excessive price increases (the Decision, paras. 48-49).
  • Since the termination was accepted as justified, it was concluded that dismissal of the action would also be lawful in respect of this claim, which rested on the allegation of bad faith (the Decision, para. 49).

The views that the examination of this claim was incomplete or that the claim should be allowed were not adopted by the majority of the Assembly; this divergence is the reason why the decision was rendered by a majority (the Decision, para. 50).

06
Assessment and Practical ImplicationsDeğerlendirme ve Uygulama Bakımından Çıkarımlar

The Assembly's Decision provides guidance for franchise and distribution law practice. It significantly weakens the legal basis of defences by franchisees that they work in their own name and for their own account and that details such as staff clothing do not affect the brand. Compliance with the corporate visual standards set by the brand owner has been accepted as one of the essential elements of the agreement.

The Limits of the Specific CaseSomut Olay Sınırı

It should not be overlooked, however, that the Decision rests on the particular features of the specific case. The agreement expressly provided for the staff clothing obligation and for a notice and termination procedure in the event of breach; the breach was documented by two inspection reports and a notarial determination and continued despite a formal notice. The Assembly emphasised that, even where the agreement lists grounds for termination, the judge will assess whether the alleged breach has made the continuation of the agreement intolerable. The Decision should therefore not be read as meaning that every breach of a uniform rule will in itself constitute just cause for termination (the Decision, paras. 34, 36-37, 41 and 44).

The four elements that carried just cause in the specific caseFigure 1
1 · Express contractual provisionArts. 5/7, 5/15 and 6
2 · Documented breachtwo inspection reports and a notarial determination
3 · Notice with a deadline05.03.2012 · three days
4 · Persistence despite noticedeterminations of 28.04.2012 and 30.04.2012
Trust shaken: termination for just causeThe Decision, para. 44 · “in the specific case”. Judicial review: intolerability (para. 34); a ground of termination listed in the agreement does not remove this review.
In the DecisionKararda

“Even in this case, the judge must assess whether the breach of contract relied on as a ground of termination has, in the specific case, made the continuation of the agreement intolerable. For this right, too, may only be exercised in accordance with the principle of good faith.” (the Decision, para. 34)

Evidence and Contract Draftingİspat ve Sözleşme Tasarımı

In practice, franchisors often try to document breaches found at outlets solely through internal reports or e-mail correspondence, which leads to difficulties of proof at trial. As seen in the Decision, the on-site determination and photographing of breaches through a notary, followed by a formal notice granting the period required by the agreement, were decisive procedural steps in the termination withstanding judicial review.

The Decision also has a consequence for contract drafting: defining visual standards and staff clothing concretely in the agreement or its annexes, and establishing in advance a procedure of notice with a deadline followed by termination in the event of breach, makes it easier for the franchisor to prove its right of termination.

Practical checklistUygulama kontrol listesi

For franchisors

  • Corporate clothing and visual standards should be defined concretely in the agreement or an annex.
  • The agreement should state clearly by whom inspections are to be made; wording such as “appointed inspectors” should be drafted so as to cover the franchisor's own staff.
  • Inspection reports should be signed by the store manager and, if signature is refused, this should be recorded in the report.
  • If the breach continues, a notarial determination should be obtained and the situation documented with photographs.
  • A formal notice granting the period stated in the agreement should be served, and the continuation of the breach should be determined again on expiry of that period.
  • The notice of termination should set out each ground of termination separately, together with the supporting evidence.

For franchisees

  • Commercial independence does not confer freedom to disregard the corporate identity rules accepted in the agreement.
  • On receipt of a formal notice, the breach should be remedied within the period and the remedy documented.
  • Objections such as price increases should be supported by documents as well as a reservation; an allegation of bad faith requires a concrete finding.
  • It should be borne in mind that, in the event of termination for just cause, claims linked to termination such as the franchise fee, furnishing and lost profit will not be heard.
The Competent CourtGörevli Mahkeme

Finally, it should be recalled that in this case the first-instance court initially declined jurisdiction and that the Court of Cassation reversed that decision, stating that the dispute did not concern a registered industrial property right. Not every dispute arising from a franchise agreement falls within the jurisdiction of the intellectual and industrial property courts; the competent court is determined according to the subject matter of the dispute (the Decision, paras. 6-7).

07
ConclusionSonuç
“Commercial independence does not entitle the franchisee to disregard the corporate identity rules it has accepted in the agreement.”

Franchise agreements are complex continuing obligations based on mutual trust and corporate uniformity. In this system, one of the franchisor's core assets is the brand perception and commercial reputation it has built among consumers. Protecting the system's standards depends on the full exercise of the franchisor's powers to give instructions and to inspect.

The Assembly's Decision has shown that persistent breach of an expressly agreed corporate clothing obligation, despite notices and determinations, may constitute just cause for termination that disrupts brand integrity and makes continuation of the agreement intolerable. A franchisee that has caused the termination through its own fault and resistance to instructions has no means of shifting to the franchisor the entry fee it paid, its renovation and furnishing costs or its future loss of profit.

Against this background, franchisors should set out their contractual rules clearly and in terms not open to interpretation and support their inspection mechanisms with objective evidence such as notarial determinations and formal notices, while franchisees should comply carefully with brand standards, bearing in mind that their commercial independence does not entitle them to disregard corporate identity rules.

Legislation and Decisions CitedAtıf Yapılan Mevzuat ve Kararlar

Turkish Civil Code No. 4721, Arts. 1 and 2 · Turkish Code of Obligations No. 6098 · Turkish Commercial Code No. 6102, Art. 122(3) and (5) · Decree-Law No. 556 · Repealed Block Exemption Communiqué No. 1998/7 on Franchise Agreements, Art. 3(b) (OG 16.12.1998, 23555) · Block Exemption Communiqué No. 2002/2 on Vertical Agreements (OG 14.07.2002, 24815) · Court of Cassation, Assembly of Civil Chambers: 15.04.2026, E. 2025/351, K. 2026/249; 29.05.2024, E. 2024/11-178, K. 2024/307; 16.05.2019, E. 2017/11-60, K. 2019/579 · 11th Civil Chamber: 20.04.2022, E. 2020/6079, K. 2022/3196; 16.03.2023, E. 2021/7358, K. 2023/1618; 11.01.2016, E. 2015/14146, K. 2016/78 · Hatay 1st Civil Court of First Instance (sitting as a Commercial Court): 28.01.2015, E. 2013/96, K. 2015/96; 13.03.2020, E. 2016/150, K. 2020/73; 26.01.2023, E. 2022/345, K. 2023/30; 07.11.2024, E. 2024/109, K. 2024/288

BibliographyKaynakça
  • Aksu, Yağmur Nisa: “Franchise Sözleşmesinin Çerçeve Sözleşme Niteliği Taşıma(ma)sına İlişkin Tartışmalar”, Prof. Dr. O. Gökhan Antalya'ya Meslekte 50. Yıl Armağanı, Ed. Kardelen Kıraç Tokabaş vd., Cilt I, On İki Levha Yayıncılık, İstanbul, Ekim 2025, s. 303-304.
  • Gürzumar, Osman Berat: Franchise Sözleşmeleri ve Bu Sözleşmelerin Temelini Oluşturan “Sistem”lerin Hukuken Korunması, Beta Basım Yayım, İstanbul, 1995.
  • Kırca, Çiğdem: Franchise Sözleşmesi, Yetkin Yayınları, Ankara, 1997.
  • Saral, Onur: Franchise Sözleşmeleri, Yayımlanmamış Yüksek Lisans Tezi, Bahçeşehir Üniversitesi Sosyal Bilimler Enstitüsü, İstanbul, Mayıs 2020.

This article has been prepared for general information purposes only and does not constitute legal advice. The court decisions referred to are based on the decision texts accessible as at the date of publication; findings recorded in decision summaries are those of the relevant courts. This article does not create an attorney-client relationship and contains no undertaking as to its updating. 28 October 2026.

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Uğurcan TekinPartnerBeyza ErdemirAttorney at Law

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