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Good afternoon, Is there a legal way to terminate a franchise agreement that i recently signed, May 21, 2013?

Flushing, NY |

I paid an initial franchise fee on 5/21/2013 and will like to recuperate all of it, if possible.

Please advise how best to proceed?

Thanks in advance.

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Attorney answers 5

Best Answer
Posted

Sounds like you have had a change of heart. You might just try being up front with the franchisor. If you have not attended training or otherwise caused the franchisor to incur costs and expenses associated with your entering into the agreement, over and above the costs to recruit you, you might be able to amicably part ways, although you may not get back all of the initial fee as the franchisor incurred costs in getting you into the system. The franchisor may be swayed by the reason you have changed your mind.
If this does not work, you probably will need to consult with a franchise attorney to discuss your options. Some agreements will refund some or all of the initial fee if you cannot find a location within a set period ot time or will do so if you do not satisfactorily pass the training program. You will need to have the FDD and the agreement reviewed by a lawyer experienced in representing franchisees to determine whjat avenue are available under your agreement and the circumstances surrounding your entering into the agreement.

Neal Jonathan Blaher

Neal Jonathan Blaher

Posted

This is your best and most comprehensive answer. Good luck.

Posted

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 say the following. Unless there are grounds to terminate, you can't just "change your mind."

Your best bet is to consult with a franchise attorney asap to examine the contract, as well as the disclosures made (or not) in your FDD so that a determination can be made one way or another.

You can do a search here on AVVO and find a franchise attorney. That way you can present what happened in great detail and they can ask you questions about specifics so the best advice is provided.

Good luck,

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

Asker

Posted

Hi Mr. Murphy and thanks for your prompt reply. I will do as you recommend above.

Kevin Brendan Murphy

Kevin Brendan Murphy

Posted

You're welcome, and although you can try talking to the franchisor about getting out and your money back, don't hold your breath. It rarely happens, but still it's worth a try.

Posted

WOW, this is tough since you just paid. My first advise would be to IMMEDIATELY contact the Franchisor and plead your cause--they may be sympathetic, and emphasize that you haven't been trained yet and they have spent likely no resources on you yet, so perhaps they say see clear to refund you, with their maintaining a small amount for administration.....Otherwise, the FDD and Franchise Agreement will likely have a no refund provision; A franchise attorney (such as myself) might find some kind of provision in the Franchise agreement that May help, but you need to act fast before they can claim they "did everything required of them"...last resort of there is an arbitration clause you may need to go that route, and get an attorney more involved. Unless you found out something was misrepresented at this early stage, best shot at this point is likely begging.

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

Janet Spiro Martin

Janet Spiro Martin

Posted

Also, there may be some kind of refund provision if you do not pass the training, or qualify for financing, so review the FDD and franchise agreement carefully (and quickly) for that language.

Posted

It really is dependent on many things. The contract. The applicable state franchise laws. This question goes well beyond anything that can be answered here. You definitely need to speak with a franchise attorney to determine your options.

Good luck.

Bryan W. Dillon
www.singler-law.com
(707) 823-8179

Posted

Contact your attorney who represented you when you purchased the franchise right away. A review of the franchise agreement is necessary.

If this answer is helpful, then please mark the helpful button. If this is the best answer, then please indicate it. Thanks. For further information you should see an attorney and discuss the matter completely. If you are in the New York City area, then you can reach me during normal business hours at 718 329 9500 or www.mynewyorkcitylawyer.com.