Charged for services we didn't get pricing for or agree to. What can we do?

Asked over 1 year ago - Thornton, CO

We are a franchisee for a company located in Denver. The franchiser contracted someone to do their paperwork because she wanted to update her franchise agreements. When the process began we asked if we would be charged any of his fees. We were told it would probably be $300-$400 which would be split between the other franchisees and the franchiser.

Throughout the process we requested certain addendums necessary for the changes being made to the agreement. We were never told there would be additional charges for the requesting of these documents, yet we just received an invoice for $4100.00. What are our rights?

Attorney answers (6)

  1. James A Marshall

    Contributor Level 8

    7

    Lawyers agree

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    Answered . It depends partially on what your franchise agreement says in terms of costs that the franchisor may pass along to its franchisees. As to the price quoted to you by the franchisor and the resulting invoice for $4100, much will depend on the correspondence related to the requests you made for addenda and the franchisor's written response to it. You should have an attorney review your documentation promptly.

  2. Mary Michelle Clapp

    Pro

    Contributor Level 8

    5

    Lawyers agree

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    Answered . As noted by my colleagues, your rights depend in large part on your agreements. I am not entirely certain from your question exactly what occurred. It sounds like the Franchisor retained a firm to update the agreements, and that is usually a cost borne solely by the franchisor. It would be unusual for the franchisor to include a provision in the franchise agreement allowing it to pass on its legal costs associated with its own updates. Many agreements, however, allow the franchisor to recoup costs that were incurred because of a franchisee's request for changes. I would gather all of the correspondence associated with the legal work and your franchise agreement and fdd and take them to a lawyer who practices franchise law (most general practitioners do not understand the peculiarities of franchise law) to understand your rights. Many franchise lawyers will provide you with a free consultation.

    This response is not intended as legal advice or to establish an attorney-client relationship. It is for... more
  3. Kevin Brendan Murphy

    Pro

    Contributor Level 15

    3

    Lawyers agree

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    Answered . As a franchise attorney , who has actually walked the walk, owning and operating a very successful franchise, and a court-accepted, testifying franchise expert, I agree with my colleague.

    Unfortunately, the questions you need answered are much more complicated than can be answered here.

    No attorney here on AVVO can advise you without knowing all the facts and circumstances surrounding your case and the contracts entered into by the parties.

    Your best bet is to consult with a franchise attorney asap. You can do a search here on AVVO and find them. Many will talk to you at no charge for an initial consultation.

    Good luck!


    Kevin B. Murphy, B.S., M.B.A., J.D.
    Franchise Attorney & Franchise Expert
    Director of Operations - Mr. Franchise
    FRANCHISE FOUNDATIONS APC

  4. Robert John Murillo

    Contributor Level 20

    2

    Lawyers agree

    Answered . Speak with a local attorney with franchise expertise. Your agreement may allow them this right, but there are other issues at play that may give you various options. We have advised franchisers and franchisees and the review on this matter should be pretty quick.

    This answer is for informational purposes only and is not legal advice regarding your question and does not... more
  5. Peter Harris Dosik

    Pro

    Contributor Level 4

    3

    Lawyers agree

    1

    Answered . Generally, the franchisor has no right to charge you fee unless the franchise agreement specifically says that they can. As a first step, I suggest you ask the franchisor to show you the specific language in your franchise agreement which gives franchisor the right to charge you this fee.

  6. Janet Spiro Martin

    Pro

    Contributor Level 14

    2

    Lawyers agree

    Answered . I have practices franchise law over 20 years and am trying to understand your question, why would you ask for addenda? was this for your benefit? If the Franchisor had insufficient documentation, this can be in your favor as a franchisee you would not have to comply with an "obligation" which they say you agreed to put you actually didn't. Your question is a bit confusing, whose paperwork is being cleaned up--yours or theirs and why and to whose benefit this is for, yours or theirs. Then we can determine if charging you for something is appropriate or acceptable. Of course anything that the Franchisor did that is contrary that what you were told (do you have an email letter etc), is pretty straight forward of something amiss. Really need more details to assist you. Like what did they say when you told them "you told me it would only be 3-400"?? for example

    The foregoing is for informational purposes only and may not be relied on as attorney-client advice.

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