Escaping a franchise deal gone bad
You’ll need a lawyer if you want to recoup any money, but here’s what you should know before you go attorney-shopping.
Lisa Gubbels, Council Bluffs, Iowa
I live in a community that does not fill the demand for children’s entertainment, so I decided to invest in a franchise based in Georgia that did just that. I paid $35,000 in August of 2007, signed the franchise agreement, and tried to raise $250,000 to get the business running. It did not happen. The business manager changed the business plan, discussed it with me, and we went forward to open a smaller version of the franchise. I have invested a total of $70,000. I am upset by misrepresentation of what I was told I would receive from the agreement. At this time I want out and want to open my own business with no help from a franchise. Of course, I would love to get that franchise fee back as well. Any thoughts about how I can resolve this without getting into more debt?
Comment
DiggBuying out your partner
William, Denver, Colo.
This question is a follow-up to “Who gets the name in a business custody battle?”
What happens when the majority shareholder wants to franchise the business, but the minority partner is against it? The minority partner is not willing to expand with her current partner. Instead, she’d like to go it alone. Does this trigger a buyout? Is that the best and only solution? Read more…
Securing small business loans in a melting economy
The scoop on financing a chain of Dairy Queens
Sid, Atlanta
My partner and I have owned more than 10 Dairy Queens over the past 20 years. We’ve never lost any locations. Each is incorporated separately. We’ve been trying to capture another location in Alabama. They’re asking $625,000 and we’re ready to put 20 to 25 percent down. It seems hard to get a loan these days. Is it because the market is falling? Do you think we might face a problem securing the loan? Read more…
Calculating the risk of a franchise investment
Ray asked FSB about investing in a fast food franchise. Have you invested in a franchise? Do you have any advice for Ray?
Tips for selling a franchise territory
Mary Sue wants to resell her Coney Beach franchise territory. Do you have tips for how Mary Sue can successfully sell her territory?
Legal advice for a disappointed franchisee
A franchise owner may have upsold his business to reader Brett. Do you have experience in purchasing a franchise? Share your obstacles and successes here.
Features-
In a tough economy, more business owners are bartering for the stuff they need. More -
In Oregon, the Recovery Act is paying for a local small business to protect nearby communities from wildfires. More -
Smart entrepreneurs are now doing deals in 140 characters or less on Twitter. More -
As more customers choose - or are forced - to fill prescriptions by mail, independent pharmacies are struggling to survive. More -
A Texas hospitality company considers where to invest and where to cut back to weather the recession. More -
How 7 innovative companies are inspiring workers and boosting the bottom line. More -
42 startups duked it out in the world's most lucrative business plan competition. We trailed one team to the bitter end. More
