Franchise contract broken

We started a company which we setup to be franchised. One of the requests and sales came from a group that admitted that he'd been trying to copy us and was unsuccessful. We signed the franchise agreement, NDA and non-compete. He did not follow the instructions for the store he agreed to open, repeatedly. Then within 3 months wanted our approval to go across the country selling our system. We were not ready to go nationwide and we said we'd consider but not at this time and would need more information about their plans. No more information came. Later we found they had started to build a trailer using our technology and had planned to go to FL to sell the product and franchise stores under a different name. We warned them they were in breach. We got them to come back to the negotiating table twice and we met and continued to help them with the store the contracted to open. They continued to use that information not for the contracted store but for the FL store. Not only that we found they started a web site with our <companyname>franchise.com and used our logo. They have been collecting information from people about franchising and using it to misrepresent them as us and then redirect them to buy a franchise of their name. They most recently wrote us a letter from their attorney saying they would stop for $220,000. what should we do?

First of and foremost, if contracts were signed and there is language in the contract regarding the illegal distribution and copy of the franchise business plan, then it appears your franchisee is in violation. I am NOT a lawyer by no means, however, I am a business owner via a franchise agreement. There are two sides to this....your franchisee can open a business independently and be a competitor in the same industry as long as he/she is not using any legally protected copyright's/trademarks and trade secrets. Say for example, I own a hotel franchise and I want to open up another hotel business but I want to be an independent hotel brand. I can legally use my experience and business plans/models for my independent hotel as long as I am not using trademarks/copyrights/patents and trade secrets that are protected by law. You get where I am going.... on the other spectrum...your franchisee cannot be copying exactly what the franchisor is doing as long as you have legal contracts signed by the two parties and you have protected logo's (trademarks) and copyrights. You really need to hire an contract/franchise attorney who specializes in franchise/business contractual law. Good luck to you and again, get a professional opinion from an attorney. Maybe someone on this forum is an attorney in that specialization and get you some advice!

Hi there!

I'm not really a lawyer but would like to recommend you to Varrasso Legal. They offer free initial consultation with new clients. Maybe that would help instead of immediately going to lawyers and pay high prof fees.


Cheers,

Roland

*eyeroll*

Read what you wrote, spammer. You aren't really a lawyer? Is that like "little bit" a lawyer?? Either you are or you aren't.

You then helpfully add that posters should contact the law firm YOU are spamming for instead of "going right to lawyers"

Your violation of our terms of service is not welcomed nor do your virus filled spam links belong here.