I am sorry you are dealing with this. The answer depends upon the terms you agreed to in any documents you have signed. Read the contracts you have signed and consider having an attorney get involved to help you.
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If you click on "Find a Lawyer" at the top of this page and search for "Franchise" in North Carolina, you will find a list of outstanding franchise attorneys who might be able to look at your franchise agreement and tell you whether you have an actionable claim. Many attorneys offer a free consultation. Be sure to disclose the identity of the franchisor up front (before you state, email or fax any facts about the matter) so as to prevent conflicts from arising for the attorney.
Attorney Horan is licensed to practice in Massachusetts. The response provided here is informational only, not legal advice, and does not create an attorney-client relationship.
As a franchise attorney and testifying franchise expert, I can only say it's not really possible to say without examining the surrounding facts and circumstances, as well as the disclosure document and franchise agreement. Your franchise agreement (and Item 5 of the FDD) will stipulate under what conditions the franchise fee is refundable (and I'm assuming that's the $35k you're referring to). Normally, if a franchise company terminates you for cause, like you haven't found a location or opened within the required time frame, as specified in the franchise agreement, you're usually out of luck. Unless the franchise agreement specifies some type of refund that applies under these circumstances. Best of luck.
Kevin B. Murphy, B.S., M.B.A., J.D.
Attorney at Law
Director of Operations - Mr. Franchise
FRANCHISE FOUNDATIONS APC