After parties have gotten into franchise agreements, it indicates there is commitment from a franchisee to run the business for the agreed period. This period may present many challenges to the franchisee because while the expectation was that the business would be profitable, this might not be the case. This is in addition to other challenges. In consideration of franchise termination Illinois business owners should know available options.
There are some questions that franchisees should ask before signing agreements. To begin with, they must know if they are able to effectively run the business for the stated period. Further to that, they need to have a strategy they can use if things are not progressing as planned and they need to opt out. There are many risks that are experienced for any business and thus knowing the possibility of terminating an agreement will be important.
If you have a change of mind early on, there is a code of conduct which has provision for a cooling off period. The agreement can be terminated within 7 days. This should either be after entering the agreement or making payment. The cooling off period is standard and will only apply to new agreements and not when the franchiser is transferring or renewing. The refund is given less any reasonable expenses that might have been incurred.
Besides the period of cooling off which is normally enforceable for franchises, you will find agreements that never allow franchisees to bring agreements to an early end. This means an agreement should not be terminated before its term. As a result, you should carefully go through the agreement documents and if possible seek a legal opinion. This enables you to know what you are dealing with. Any potential franchisee should consider some negotiating with the franchiser before the final agreement gets signed.
The other negotiation option that might be taken into account is insertion of exit clause upon occurrence of specific events. For instance, if there was to be relocation of premises, or finances fail to be approved, it gives you the right to have the agreement terminated. All such options will need to be explored.
In the event that there is no termination option, you will be forced to operate the franchise until the term comes to an end. Nevertheless, it is possible to terminate if it is the franchiser that breeches the agreement. This will however require that you follow dispute resolution procedures laid down by the code of conduct of franchising.
It is possible to use some resolution procedures to ask for agreement termination. That can however only happen when there us cause of action against the franchiser which indicates they did breech an agreement. However, there is no surety that that process will lead to the agreement being terminated. This is because it depends on strength of your case.
You can also consider reaching a mutual agreement for termination. This is a negotiation process with the franchiser. For the best outcome, you will need to research on the best way to approach the matter.
There are some questions that franchisees should ask before signing agreements. To begin with, they must know if they are able to effectively run the business for the stated period. Further to that, they need to have a strategy they can use if things are not progressing as planned and they need to opt out. There are many risks that are experienced for any business and thus knowing the possibility of terminating an agreement will be important.
If you have a change of mind early on, there is a code of conduct which has provision for a cooling off period. The agreement can be terminated within 7 days. This should either be after entering the agreement or making payment. The cooling off period is standard and will only apply to new agreements and not when the franchiser is transferring or renewing. The refund is given less any reasonable expenses that might have been incurred.
Besides the period of cooling off which is normally enforceable for franchises, you will find agreements that never allow franchisees to bring agreements to an early end. This means an agreement should not be terminated before its term. As a result, you should carefully go through the agreement documents and if possible seek a legal opinion. This enables you to know what you are dealing with. Any potential franchisee should consider some negotiating with the franchiser before the final agreement gets signed.
The other negotiation option that might be taken into account is insertion of exit clause upon occurrence of specific events. For instance, if there was to be relocation of premises, or finances fail to be approved, it gives you the right to have the agreement terminated. All such options will need to be explored.
In the event that there is no termination option, you will be forced to operate the franchise until the term comes to an end. Nevertheless, it is possible to terminate if it is the franchiser that breeches the agreement. This will however require that you follow dispute resolution procedures laid down by the code of conduct of franchising.
It is possible to use some resolution procedures to ask for agreement termination. That can however only happen when there us cause of action against the franchiser which indicates they did breech an agreement. However, there is no surety that that process will lead to the agreement being terminated. This is because it depends on strength of your case.
You can also consider reaching a mutual agreement for termination. This is a negotiation process with the franchiser. For the best outcome, you will need to research on the best way to approach the matter.
About the Author:
Learn more about the franchise termination Illinois process and get more info about a reputable franchise and dealership litigation firm at http://www.cdcaruso.com/franchise-distribution/terminations today.
No comments:
Post a Comment