Home > Legal > Questions & Answers > Bankruptcy / Debt > I purched a franchise for a business the onriginal co sold to a large corp. they forced' s me to loose the franchise then sold
I purched a franchise for a business the onriginal co sold to a large corp. they forced' s me to loose the franchise then sold
The answer depends on how the franchise company forced you to lose your franchise, and which company it was - the original one or the successor entity. If they engaged in conduct that was in violation of the terms of your franchise agreement, or in an unfair business practice proscribed by law, you have a defense but will need to fight the lien. Show your franchise contract and discuss the circumstances with a franchise attorney.
If this is in NY state you should contact the NY Attorney General's office and discuss your issue with them to see if they will pursue the matter on your behalf. NY has a state franchise law which may protect help you in your situation. Without reviewing the actual franchise agreement you signed, I am unable to determine if you have a case against the large corporation or the original company. Most times franchisors do not include restrictions on their ability to transfer the franchise to another company. However, you most likely have rights under your agreement which should be explored by both the NY Attorney General's office and a private franchise attorney in NY to advise you.
Without knowing what your Franchise Agreement states, you may still be liable for whatever funds they are placing the lien on your home for. However, there may be clauses that affect their ability to collect from you since they were not the original franchisor. You should contact a franchise attorney to have them review your specific Franchise Agreement.
This is now happening more frequently. Acquirors of franchising companies do so because they believe they see opportunities to squeeze more financial performance out of the system than curret owners are getting. The result is more default notices to franchisees perceived to be out of compliance with contract terms.
If you have a lien on your house, either you were out of compliance or for some reason did not defend against your default notice or bring yourself back into compliance. What you can do now depends upon what you signed on your way out. If it includes a release, you are probably out of luck. If it does not, then you have ot look at he limitations period applicable to any claims you may have against your franchisor. If you did not release the franchisor; and if you did not commit acts of waiver of your claims; and if they are not extinct due to not having been brought in time; then you have to have an experienced franchise litigator evaluate the evidentiary strength of your claims.
