A franchise agreement has led to a recent lawsuit in Louisiana. The lawsuit alleges breach of contract, as well as other claims. The nature of the claim is a franchise contract dispute. The man who brought the lawsuit asserts that he paid over $60,000 in franchise purchase agreement payments and met with the parties he brought the claim against over a period of several months concerning the franchise purchase agreement. The franchise purchase agreement is for a company that performs oil change services.
According to the man purchasing the franchise -- who brought the contract dispute claim -- there were several restrictions associated with the franchise purchase agreement that he was not familiar with at the time he made the agreement and would not have made it had he been aware of them. The nature of the restrictions was that the property that was the subject of the franchise purchase agreement was not available for lease without permission from the owner of the property and the franchise purchase agreement was prematurely completed.
The purchaser also asserts that the parties he was purchasing the franchise from agreed to help him operate the franchise but later notified him they would not help him and locked him out of the computer system for the franchise so he could not operate the franchise. The purchaser is seeking rescission of the contract for purchase of the franchise, a refund or return of all franchise payments paid, interest and consequential damages.
A franchise opportunity can be an excellent business opportunity, however, there are legal complexities associated with a franchise transaction that should always be considered and understood.
Contracts underlie most business transactions today but they are not always the same or necessarily simple because they protect important business rights and outline the terms of unique agreements. With the proper knowledge and guidance, contract relationships and disputes do not have to be a challenge but are, instead, and important aspect of any business opportunity.
Source: Louisiana Record, “Man seeks rescission of purchase of SpeeDee Oil franchise,” Carrie Bradon, May 13, 2016