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Can you blame the franchisor if your business fails?

On Behalf of | Jun 28, 2022 | Breach Of Contract, Franchise Agreements, Fraud And Misrepresentation

Consider this hypothetical: You invested your hard-earned savings into buying a franchise, and now you wish you never had. The franchise has turned out to be nothing like the success you believed it would be. Your financial records show that at this rate, you will be in deep financial trouble very soon.

Did the franchisor sell you a false dream?

First, you need to examine how others with the same franchise are doing. If other franchisees seem to be doing fine, then your struggles might be the result of your location, your business skills or other factors. If you see plenty of others having the same problems as you, then it is likely there are fundamental flaws with the franchise itself.

Has the franchisor breached the agreement?

The franchise agreement says the franchisor will do certain things for you. For example, the franchisor will provide a certain amount of training and marketing. If the franchisor has not complied, you may be able to hold it responsible for breaching the contract. The same could apply if the agreement gave you an exclusive territory and the franchisor allowed another franchisee in your territory.

Did the franchisor misrepresent anything to get you to sign?

Some franchisors paint things rosier than reality when seeking to attract franchisees. If you discover the franchisor purposefully overstated financial information, you might be able to claim misrepresentation of facts.

Seeing your dreams fade and your investment dwindle can be devastating. Getting skilled legal help to understand the options available to you under franchise law will be crucial.

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.