California Franchise Law Legal Questions

A franchise is a contract and is binding like any other valid contract.  If the franchisor complied with federal and California franchise laws when it offered to sell you the franchise, then most likely the Franchise Agreement is enforceable.  Many franchise agreements state that they last for a certain number of years, and that the franchisee owes the franchisor the franchise fees for the entire term of the franchise agreement in the event the franchisee breaches the franchise agreement or in the event the franchisee terminates the franchise agreement early before it is supposed to end.  You need to consult an attorney to determine whether the franchise agreement complies with California and federal law, and whether the franchise disclosure documents complied with federal and California law.  In some cases, the franchise agreement can be held to be fraudulent, and in that case you would be released from future payments.  In other cases, the franchise agreement will be held to be valid and can be enforced, even if it requires future payments.  In many cases, the franchisor will negotiate a settlement with a franchisee who goes out of business.   I am an attorney licensed to practice law in the State of Ohio and I am not licensed to practice law in the state of California.  This answer is intended to be general information and does not constitute legal advice on your particular set of facts.  No attorney client relationship is established by this answer to your question.  ... Read More