If a franchise opportunity is misrepresented to a franchisee, can they get their money back?
“If a franchise opportunity is misrepresented to me, can I get my money back?”
The answer to that question, in terms of a franchise being oversold, is: assuming we can prove that the rules that apply to the sale of a franchise (statutory rules, common law principles like misrepresentation and fraud) have not been honored, if something has been breached, then the appropiate remedy is that you can end that relationship, even if the writing you signed says you can’t get out early, and you can be made whole with restitution damages (restitution being enough to restore you to the financial position you were in when you entered this relationship).
So the answer tends to be “yes” to the question you asked. Let me say this: it’s often times a question of proof. On the one hand, can we prove that the franchise salesman said this – made an earnings claim, for example – in ways that aren’t allowed by the laws that apply to the sale of a franchise. Such as: is an oral representation of what you can expect to make different than what’s set forth in the franchise disclosure document? If we can prove that, and indeed your experience was different than what that salesperson told you it would be, you’re entitled to get out and get your money back.
We just got an award here two weeks ago awarding a single-store franchisee in excess of 1 million dollars, plus attorney’s fees, on that very claim.