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I signed a franchise contract in California but moved to Maryland. I want to leave the franchise. How can I do this?

Parkton, MD |

I signed the contract about a year ago. I moved out east to start the business out East but have not gotten many jobs lined up because the main office has not booked me work. I want to start my own company out here since it seem like I am going to have to do all the leg work myself. Is the contract void because of the out of state move? How can I legally get out?

Attorney Answers 4

  1. As a franchise attorney, I can say this. Franchise agreements are not void because of a move by a franchise owner. If there's been a breach of the franchise agreement on the part of the franchisor, and you've given notice and it remains uncured, different story.

    Bottom line is you need to show the contract and other related documents to a franchise attorney for advice.

    Best of luck,

    Kevin B. Murphy, B.S., M.B.A., J.D.
    Attorney at Law & Franchise Expert
    Director of Operations - Mr. Franchise

  2. As my colleague points out, moving east wil not have any effect on the validity of your franchise agreement. From what you have stated, it seems that under the franchise agreement the franchisor was to find you jobs, but has not done so. This may be a breach of the agreement by the franchisor and give ypu certain rights, including the right to terminate the agreement. As also pointed out, if the franchisor has delivered notice to you, that may complicate things. You need to see an experienced franchise lawyer who can eleicit all the material facts, review the agreement and the FDD and provide you with well reasoned advice. You should do this soon.
    Good luck.

  3. Another aspect you need to consider is what governing law is specified in the agreement - this may have an impact on the enforce-ability of the post-term non-compete provision that may be implicated due to your desire to start your own company. But I also agree that the agreement is not "void" due to the move and that this an area that requires the help of experienced franchise counsel.

  4. As my colleagues pointed out, it would be extremely unlikely that your move would somehow void the agreement. And unfortunately, it can be very complicated to get out of a franchise agreement since it usually requires either agreement from your franchisor or some sort of leverage or basis to claim that your franchisor is in breach of the agreement. I'm really not trying to sell you anything, but you really should talk to an experienced franchise attorney, whether it's me or anyone else. It is extremely rare that the agreement allows the franchisee to unilaterally leave (or just walk away). And if they do, it often opens the door to a lawsuit by the franchisor. It is really essential to be proactive in these matters and address them with the franchisor sooner rather than later.

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