The collectibles market is one of the most fiercely contended, with Franklin Mint's competitors including Brooks & Bentley, Comp-ton & Woodhouse and Danbury Mint.
Franklin Mint is traditionally a big spender in the Sunday newspaper supplements but has cut its spend recently.
Its products include novelty plates, porcelain dolls and eggs with images of people such as John Wayne and Elvis Presley.
MediaVest Direct, the agency's direct response division headed by Nigel Waring, will handle the account.
Mitch Fenimore, the advertising director for Franklin Mint, said: "We are looking with great excitement to MediaVest to implement a number of innovative approaches to new customer acquisition. We feel that Media-Vest Direct's experience in the direct response industry will help take our business to the next level."
Carat held the account for more than five years and was also the incumbent in some European territories. It is understood that these contracts have also been terminated.
MediaVest takes over the account at the beginning of next year and Franklin Mint's creative account, which is handled in-house, remains unaffected.