In the literature, quite a lot of emphasis has been placed on franchise - a form of cooperation between entrepreneurs - as well as franchise agreements that constitutes a framework for such cooperation. It should be noted that, although, this matter is not addressed in the economic literature and even not fully covered in the legal one, it is an interesting subject due to a legal relationship of the parties after the termination of cooperation. To a large extent the franchise agreement uses the principle that refers to a free development of the legal relation between the parties. All this determines that the effects of a termination of the legal relation are not always easy to specify. Knowledge of this subject area might contribute to the formation of the rights and obligations of the parties between whom a contract is signed, where a number of situations will be predictable. Therefore, the article provides an accurate description of the franchise agreement, the effects of the franchise termination, recipient's obligations of confidentiality, non-compete after the franchise termination and the possible ways to end the legal relation and mutual settlement of the parties. The article outlines basically the problem of the effects of the franchise termination, but only in relation to its most simple form. A variety of franchise agreements, the actual differences in the situation of the parties at the end of cooperation often lead to the formation of the specific situations. Therefore, it is required to introduce the necessary changes to the franchise agreements that would embrace the situations, when the unilateral withdrawal from the legal relation is acceptable, as well as the matters of mutual settlements in different cases of termination of the legal relation. In cases of mutually agreeable termination obviously there will be a possibility of working out an agreement as to the consequences of such action. In practice, however, the relation between the former parties of the contract may not be so good and so easy. The legal effects of franchise termination by way of a proper provision in the contract should be referred to an arbitration court. To summarize, the legal situation of the parties after the franchise termination is difficult for many reasons and in addition there is no clear basis in law.