When you purchase a franchise, you are buying what is essentially a ready-made business. The franchise owner has already done most of the work—marketing, product development, system establishment and so on—so you don’t have to.
This is one of the primary selling points of a franchise. However, some franchisors may fail to deliver on their promises, leaving you with a huge financial risk.
With so much at stake, it is crucial to take action as soon as possible. Here is some important information that can help you get started.
Common ways franchisors may not deliver
Some franchisors fail to fulfill their responsibilities and obligations as outlined in the franchise contract. This can occur in various ways, such as:
- Inadequate training or support: Providing insufficient initial or ongoing training.
- Misrepresentation of earnings: Giving you misleading financial projections or earnings claims.
- Lack of marketing assistance: Not delivering promised advertising or marketing support.
- Territory violations: Opening competing units nearby or allowing encroachment.
- Supply chain issues: Failing to maintain quality or consistency of required products.
Without the support you need, you may experience a myriad of issues, ranging from lack of supply to weakened marketing. Unless the franchisor fixes their deficiencies, these problems can cause a major financial strain for your business.
Potential legal actions for franchisees
There are many possible remedies for franchisees who do not receive what they are promised. These include but are not limited to:
- Breach of contract lawsuit: Violation of the franchise agreement may be enough grounds for a breach of contract suit. The goal is to seek damages for financial losses due to the franchisor’s breach.
- Fraud or misrepresentation claims: If the franchisor provided false information, especially in the Franchise Disclosure Document (FDD), it may be possible to file a fraud or misrepresentation claim under the Florida Franchise Act.
- Violation of franchise laws: Another option is to file complaints with state or federal regulatory agencies. In Florida, you may be able to direct your complaint to the Attorney General’s Office or the Department of Agriculture and Consumer Services.
Lastly, consider consulting a business law attorney knowledgeable in franchise disputes. It can be challenging to take legal action on your own. But with legal guidance, you gain better odds when fighting for your franchisee rights.
