You pay an elevated fee when you peg your loyalty to a franchise. For instance, opening a convenience store as part of the 7-Eleven franchise will cost you more than opening it without the brand association.
It is a model that can work well. Otherwise, no one would do it, but the restrictions the franchisor places on you can stifle opportunities as well as offer some you might not otherwise have had.
If you fail to play by the rules of the franchise agreement, you can guarantee the franchisor will be quick to act. Yet, some franchisors can break the rules themselves. What can you do then?
How might the franchisor or another franchisee encroach on your franchise?
Let’s say you took the deal on the condition that you would be the only person allowed to operate under that franchise in your town. Then you notice a new sign bearing their logo just down the road. You complain and the franchisor comes up with an excuse for why the contract does not forbid what they have done. For instance, they say you are still the only Happy Burger “restaurant” in town because the new person selling Happy Burgers only does takeaway.
Or, imagine that you believe you have sole rights to the Get Fit Quick Gym franchise in your town. One day you notice Facebook ads targeting people in your town, encouraging them to visit the Get Fit Quick Gym in the next town, a 15-minute drive away.
Franchise agreements are complex, so if you think there is an issue, it is best to get legal help to review the contract in detail. Once you are sure encroachment has occurred, you need to find out more about the legal options to address it.
*NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.