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Can I sue franchiser and franchisee for franchiser's breach of contract ?

Santa Clara, CA |

Contracted with franchise and holding company ; they won't pay ; can I name the franchiser as a defendant as well ?

My apologies for the confusion, as I was edited by Avvo...I contracted with the franchisee and it's holding company to construct a restaurant; they are now refusing to pay. I am looking for a way to get the franchisor on the line, as the franchisee/restaurant is basically insolvent. I was promised a percentage interest in the franchise as compensation when they couldn't pay.

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Attorney answers 6


Without anything remotely resembling facts, no one will be able to point you in the right direction.


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 can only say the following.

Generally, you can only sue someone you have a contract with, not just add in anyone here and there.

You need to restate your question with more specifics.

Good luck,

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

Kevin Brendan Murphy

Kevin Brendan Murphy


It's probably best to consult with a local franchise attorney close to you as it's not smart to post information on a public forum like this. It can be (and likely would) be used against you.


I agree with my colleagues, you have not provided enough information for anyone to help you. Please elaborate on your issue so we can attempt to address it.

This response does not create an attorney-client relationship and is not intended to provide legal advice for your specific situation.


The answer to your question depends on what this additional party you want to sue (I believe you mean the franchisee) failed to do. If your contract is with the franchise/holding company (franchsor), generally you can only sue that company for breach of that contract. However, if another party breached some other legal duty that exists in the law independently of any duty that may exist under the contract, then you may have a legal claim for violation of that independent duty. The key here is, did this other company (franchisee) violate some legal duty to you. You will need to talk with an experienced franchise attorney to help you answer that question. Best of luck.


If your legal action is for only breach of contract, then normally the defendant would be only the other party to the contract. But, in certain circumstances, there are legal theories that can give rise to liability on the part of non-parties -- such as tortious interference with contract, negligence, and other tort theories. Agency theories can sometimes be applied to impute liability on a non-party -- but this would normally not be applicable in a legitimate franchise system. The best advice is to consult an experienced litigation lawyer in your jurisdiction (unless the contract at issue provides for a different choice of law) about your particular facts.

This response provides general information only. Nothing included in this response should be construed as creating an attorney-client relationship, or as the provision of legal advice.


The franchiser is not responsible for your claims against the franchisee. If you try to include them they will quickly move to dismiss and likely easily win that. I would also expect them to sue you for a frivolous claim.

Do not think about doing a lawsuit yourself as it is too complicated, in particular in this situation. Good luck.

This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.