There are many reasons why a family child care provider may want to break her contract with a parent.
Whatever your reason, you should follow the terms of your contract about how to end it. If your contract says you must give parents a two-week notice before terminating it, do so. However, if there are special circumstances that put children, you, or your business at risk, go ahead and terminate immediately.
If you are terminating and the parent has paid for days that you aren’t willing to provide care, it is reasonable for you to refund the parent for those days. For example: On Monday morning you tell the parent you will no longer provide care as of the coming Friday. Your contract requires you to give a two-week notice and the parent has paid you for the coming two weeks. Give the parent a refund for the second week you are not willing to provide care.
If you tell the parent they can bring their child for the next two weeks and the parent decides not to bring her child, you do not owe the parent a refund.
I strongly recommend that providers put in their contract, “Provider may terminate at will” to give yourselves maximum flexibility in ending your contract.