This will depend on what your franchise agreement says, but generally speaking, I would be very surprised if the agreement allowed this kind of behavior. Regardless, depending on the circumstances, it may constittue an unfair trade practice. I would contact an attorney for a consultation as soon as possible.
I am not your lawyer unless you hire me, sign an agreement, and pay my fee. This answer is not legal advice--it is just an attempt to point you towards the resources you need.
Mr. Lord is correct. Franchise agreements usually do not allow that type of conduct by a franchisor. Sounds like unfair competition/unfair trade practice to me. Contact a business litigation or franchise law litigation specialist in your area for specific advice. You can find one here on AVVO for sure. Good luck.
I am not your lawyer and an answer on AVVO is not intended as legal advice but is provided for general informational purposes only. If you desire legal advice, please consult a lawyer and form an attorney client relationship.
I am noyt in your State but I agree, look at the agreement. It provides a roadmap to many disputes, or it should
I am an Arizona attorney. AVVO does not pay us for our responses. Simply because I responded to your question does not mean I am your attorney. In Arizona a non-lawyer is held to the same standards as an attorney so there are dangers to representing yourself. This is for informational purposes only and should not be considered as legal advice. If you require legal assistance an in depth discussion of your case is needed as there are many other issues to consider such as defenses, statute of limitations, etc.
Along with the franchise agreement, you would also want to look at the Ops Manual that your franchisor gave to you. That may even address the ability to price your product. One important thing to figure out is what your market is pursuant to the agreement. A lot of franchise territories are more limited than one might think, particularly with restaurants. Good luck.
Many franchisees assume that when they acquire a franchise they will be given an exclusive territory by their franchisor. Before even delving into the question how exclusive an exclusive territory really is, franchisees should be aware of the fact that many franchisors simply do not provide for any exclusivity at all. In those instances, franchisors provide for what is sometimes referred to as a four walls territory, that is, the territory simply encompassed by the four walls of the franchisee’s retail establishment. When a franchise agreement provides for exclusivity, it is necessary to understand the exact terms of your territorially rights
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