Ways To Get Out Of A Franchise Agreement
If you`re wondering how to get out of a franchise, there are many factors to consider before proceeding. Most franchise agreements include non-compete agreements that prohibit the franchisee from working in the same business in the same location for one or two years. Whether and how to avoid being caught up in these covenants depends on countless factors and circumstances. Many franchise agreements contain clauses that attempt to exclude a franchisor`s liability for misrepresentation. However, these clauses must pass an adequacy test to be enforceable. In the most recent case of Ali v Abbeyfield VE Ltd (2018), the Vision Express franchise agreement contained a clause excluding any liability for pre-contractual statements, with the exception of those appended to the contract in writing or fraudulent pre-contractual statements. The clause was deemed inappropriate by the court because: And if you read this before signing a franchise agreement, please do your due diligence with respect to the franchise and make sure you fully understand the terms you are signing. It`s all too easy to get carried away by the excitement, manage and start your own business, but the time spent on it from the beginning could help avoid a costly mistake. There are many different reasons why a party to a franchise agreement may initiate litigation, which can often follow unsuccessful mediation. Selling the franchise to a third party approved by the franchisor at the best possible price is usually only done if the business is operating profitably. It`s a buyers` market, no buyer will be generous, and there are hundreds of franchises on the market.
You may get the impression that the business did not work due to some mistakes of the franchisor. Perhaps the franchisor did not provide adequate training or support. The problem that franchisees face here is that franchise agreements are designed in favor of the franchisor and, in most cases, do not contain an explicit contractual right for a franchisee to terminate the contract due to the substantial breach of the franchisor`s agreement. In addition, a franchisor`s contractual obligations under the contract are often vague, so it is not always easy for a franchisee to be able to point out clear contractual obligations that the franchisor is violating. In general, no. Almost all franchise agreements in the UK have a fixed term of 5 years and the franchisee is required to manage the franchise business during this period. .
Comments are closed.