My husband and I have been in business for four years in a franchised restaurant. The lease agreement and franchise agreement were both based on Five year terms which would mean that both come to an end by the end of the year should we not renew. The first year of business was phenomenal and exceeded all expectations - ours, the franchisee and the finance institution that granted us the loan. Thank goodness we saved the excess money as subsequent years were tougher with rising food prices, petrol increases, wage increases, insane electricity increases etc. As with all new shopping centres, there is a lot of excitement and interest which brings in feet and sales. A huge new centre opened a kilometre away and the situation started turning. We saw less feet, more shops closed around us and sales dropped. In spite of numerous requests to the landlords to come to the party and talk about how we can improve things, our landlords signed a lease with a direct competitor to trade right next door to us and exacerbated the demise of our restaurant. We have manged to keep things very tight and until this point have been able to pay all the bills, however the last two months have become more tough where we find ourselves owing the landlord and the franchise money. This is not going to get easier and I fear that if we continue trading we may find ourselves owing way more than if we opted out at this point and kept the damage to a minimum. What are the implications with the landlord and the franchisor should we terminate our contracts prematurely? We are aware that staff will need retrenchment packages and leave payouts, and will honour that first and foremost. Your comments and advice would be greatly appreciated.