What to do if I purchased a franchised business but the business model sold to me does not work?

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What to do if I purchased a franchised business but the business model sold to me does not work?

Other information provided during the discovery process was exaggerated or completely false. What are my options? The Franchisor will only help me sell if I agree to terminate. They will allow me specified amount of time to sell after which all the investment will be lost and I will no longer have any rights to the territory or database. I will not be able to continue to sell the franchise either if I chose to terminate. I am not sure what my legal rights are.

Asked on July 17, 2013 under Business Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

IF the franchisor lied to you (e.g. information was exaggerated or completely false), then that knowing misrepresentation (lie) about material (important) facts may constitute fraud, which could give you grounds to sue them for all your losses. If the amount at stake is several thousand (or tens of thousands) of dollars, consult with an attorney about seeking recovery and vindicating your rights. If less then $3,000, you probably want to work with them, even if you were wronged, to resolve this as best as you can, since you'd likely spend more  on legal action than you could recover. Good luck.


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