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"notice: to comply with the terms of any notice specifying a breach of provisions of this agreement and requiring the breach to be remedied so far as it may be but nothing in this clause is intended to require DMC to service notice of any breach before taking action in respect of it."
It means that DMC may serve a notice in the case where you are in breach of a provision of the franchise agreement requiring you to rectify the breach, but there is no legal obligation on them to serve such a notice.
If you feel that the franchisor is in breach of the agreement, I would advise you to instruct a solicitor to write to them pointing out exactly what provision of the agreement has been breached.
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Yes, you should inform them that you are disputing their purported termination and that the dispute should be referred to mediation in the first instance, as per the contract.
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