How To Cancel A Franking Machine Contract (Without Big Exit Fees)

If you've landed on this page, there's a decent chance you've just found out your franking machine contract renewed itself without you noticing. Or you're trying to leave and someone's quoted you a settlement figure that made you spill your tea. You're not alone. Franking leases are some of the most complained about contracts in small business, mostly because of how they renew.

The good news is that there's usually a way out, or at least a cheaper way through. Here's how to approach it.

Step 1: Find and read your contract

Before you ring anyone, dig out the paperwork. You're looking for the agreement you signed, not the brochure. If you can't find it, ask your supplier for a copy in writing. They have to be able to show you what you agreed to.

Look for these clauses:

• Start date and term. How many months or years did you sign up for?
• Renewal clause. Does the contract renew automatically? For how long?
• Notice period. How much notice do you need to give, and when does the window open and close?
• How notice must be given. Some contracts insist on a letter, sometimes by recorded delivery. An email or phone call might not count.
• Early termination. What happens if you end the contract before the term is up?
• Who you contracted with. Franking leases are often financed by a separate leasing company, not the dealer who sold you the machine. You may need to give notice to both.

Highlight each one. You'll need them for the next steps.

Step 2: Work out where you are in the contract

Your options depend on timing.

You're inside the notice window. This is the best place to be. Send your notice now, in the format the contract asks for, and keep proof.

You've missed the window and it's renewed. Annoying, but not hopeless. Read the renewal clause carefully. Some renew for a full new term, others for a shorter period such as a year. Some contracts let you cancel at any time after renewal with notice. It's worth checking before you assume you're stuck.

You're mid term and want out early. You'll usually have to pay a settlement, often the remaining payments, sometimes with a discount for early payment. Ask for the figure in writing.

Notice periods

Notice periods vary between suppliers and between individual contracts, so we can't give you one number that applies to everyone. What we can say is that it's common for franking and office equipment leases to require written notice within a specific window before the end date, and to renew if notice isn't received. Treat your own contract as the only source of truth, and if anything's unclear, ask the supplier to confirm in writing.

Exit fees

When you leave early, you'll typically face some combination of:

• The remaining lease payments, or a percentage of them.
• A collection fee for the machine.
• Charges for any unpaid service or software fees.

Ask for a full breakdown. Settlement figures sometimes include future service charges you wouldn't actually receive once the machine's gone, and it's reasonable to ask for those to be removed.

Switching to a new supplier

This is the route most businesses take, and often the cheapest. Rival suppliers want your business, and some will help with the cost of leaving your old contract as part of the deal. It's not guaranteed, but it's always worth asking.

How to do it properly:

1. Get your settlement figure from your current supplier, in writing.
2. Get quotes from at least two other approved suppliers. Tell them your current contract situation upfront. Our approved suppliers page lists the main manufacturers.
3. Ask each one directly whether they'll contribute to or cover your settlement.
4. Get any offer in writing, including exactly how much they'll pay and when.
5. Don't stop paying your old supplier until the settlement is actually made. Missing payments could hurt your credit.

If you just want out because your post volume has dropped, consider whether a smaller machine on a shorter term or rental would suit you better.

Sorting out your postage credit

Any postage you've paid for and haven't used belongs to you. Before the old machine is collected, ask how the balance will be refunded or moved to your new machine. Get a final statement showing the balance on the day the meter is closed.

Selling your machine

If you own your machine outright rather than leasing it, you may be able to sell it. Bear in mind it needs to be Mailmark enabled to be any use to a buyer, because since 1 January 2023 Royal Mail only accepts franked mail with a Mailmark barcode. See our guide to selling your franking machine.

Template cancellation letter

Here's a simple letter you can adapt. Fill in your details and check it matches any wording your contract requires.

[Your business name] [Your address] [Date]

[Supplier or leasing company name] [Their address]

Agreement number: [number] Machine model and serial number: [details]

Dear Sir or Madam,

I'm writing to give notice that we do not wish to renew the above agreement and wish to terminate it at the end of the current term on [end date], in line with the notice terms of the agreement.

Please confirm in writing that you've received this notice and that the agreement will end on that date. Please also confirm the arrangements for collecting the equipment, the final meter reading, and the refund of any remaining postage credit.

Yours faithfully,

[Name] [Position]

Send it by a method that gives you proof of delivery, such as Royal Mail Signed For, and keep a copy. If the contract says notice must go to a specific address or department, use that one.

How to avoid this next time

When you sign a new agreement:

• Write the notice window dates in your diary with reminders a few months ahead.
• Ask for the renewal terms to be explained in plain English before you sign.
• Prefer contracts that roll month to month after the initial term, rather than renewing for years.
• Keep a scanned copy of the signed agreement somewhere the whole team can find it.

Keep a paper trail

Throughout all of this, keep copies of everything: your notice letter, proof of delivery, emails, settlement quotes and any promises from a new supplier. If there's a dispute later about whether notice was given in time, that paper trail is what settles it.

FAQs

Can I just send the machine back?

Not usually. Returning the machine doesn't end the lease. You still owe the payments unless the agreement is properly terminated.

Can I cancel because the machine doesn't work?

If the machine is faulty and the supplier hasn't fixed it under the service terms, put your complaint in writing and keep records. That may give you grounds to negotiate an exit.

Who do I contact if a separate company finances the lease?

Give notice to the leasing company named on your agreement, and copy the dealer in.

Looking for a better deal?

If you're leaving because you're paying too much, it's worth seeing what's out there. Approved suppliers often compete hard for businesses switching from another brand. Compare franking machine prices.