For many of those that dream of starting their own business, investing in a franchise opportunity can make that dream seem like a reality. Although it may appear less risky than starting a business from the ground up, many times the franchise business is not everything one hoped it would be and can quickly turn that dream into a nightmare.
Franchisees commonly battle rigorous and tightly inspected guidelines set out by the franchisor in the franchise agreements and if that isn’t the case, sometimes actual sales are nowhere near the sales projection that the franchisor represented to them. Franchisees also rightfully have the expectation of guidance, training, and support from the franchisor but in reality, may receive little to no support at all.
All of these common issues that franchisees face make it difficult to run a successful business but they may also be grounds to terminate the franchise agreement, or otherwise give rise to a claim against the franchisor. See Long John Silver’s Inc. v. Nickleson, 923 F. Supp. 2d 1004, 1020-1021 (W.D. Ky. 2013) (misrepresentation of past or present facts upon which future projections were derived served the basis of a fraud claim); see also Learning Express, Inc. v. Ray-Matt Enters., 74 F. Supp. 2d 79, 84 (D. Mass 1999) (franchisee’s allegation of franchisor’s failure to provide training and assistance constituted an actionable claim).
If you are looking to get out of a bad franchise relationship and believe that there are grounds to terminate your franchise agreement, please contact the attorneys of Zarco, Einhorn, Salkowski for a consultation.
Brenda Phang
Law Clerk
