Under federal law, persons selling franchises have to furnish a franchise buyer with a Franchise Disclosure Document that meets detailed disclosure requirements prescribed by federal regulation at least 10 days before the franchise buyer gives any money to the franchise seller. If the business arrangement you entered into qualifies as a franchise, then this franchise seller has violated the federal franchise laws. Unfortunately, there is no private right to sue the franchise seller under the federal laws. Some states give franchise buyers the right to sue the franchise seller for violating the federal or state laws on franchising, but Texas is not one of them.
Your remedy under the federal franchise laws is to file a complaint with the Federal Trade Commission in Washington, DC, and the FTC may investigate this franchise seller. However, you may have the right to sue the franchise seller under a breach of contract claim since contracts do not have to be in writing. It depends on what you agreed to in the 1-page business opportunity statement your signed. There may also be a business opportunity law in the State of Texas that could give you a right to sue this franchise seller. You should consult an attorney licensed to practice law in the State of Texas to find out if you have any way to sue the franchise seller to get your money back. Your rights will also be affected by any other written agreements you signed.
I am an attorney licensed to practice law in the State of Ohio and I am not admitted to practice law in Texas. This answer is intended to give general information on federal franchise law and not to advise you specifically on your legal rights. An attorney advising you on your legal rights against this franchise seller will have to review all the documents you signed or that were given to you.
Answered on Nov 16th, 2011 at 6:50 PM