Franchisor misrepresentation? do I stand a chance?

[James67]

Hi all,
I joined a franchise in 2004 and there is a great difference between what was expected from the franchisor and what the reality is.

Many of his promises were vague or implied however there are 2 points that I think may constitute misrepresentation.

Firstly I believed that they were a member of the British Franchise Association, as it said so on their invoices prior to my signing with them, however after attempting to contact BFA for concilliation it turns out they ceased to be members just before I signed, and continued to feature the claim "BFA associate member" on all their invoices for some time afterwards.

Secondly, we were inticed into starting training with them on the basis that the franchise cost £6,500 and always intended to join the franchise. Training costs would be deducted if we signed. It then became apparent that the true cost was over twice the advertised amount, with the second part being an amount paid monthly, the franchisor often chose to ignore this fee completely when promoting the idea of signing the franchise agreement, or if pushed described it as a managment fee.

Set up costs have been far higher than estimates, we have remortgaged twice in 1 year, and are now up to 100%, the only way my business will survive is if I can leave the franchise, and continue to trade under my own name (which i do now anywat as there is no recognition in the marketplace of this franchise name, I am effectively on my own but tied to use the franchisors appointed suppliers ) but if I walk away and he threatens legal action would I be able to countersue for misrepresentation?

I feel very strongly that morally I am in the right, but ultimately i can't really afford a legal battle unless i know my case is watertight. I appreciate that first advice would be 'contact a lawyer' but thought someone here may be able to tell me if this would be a waste of my time and money before I invest in one.

Sorry for the long post, but if someone could help it would be appreciated!

Thanks

[Rob Holmes]

I strongly suggest you get a good franchise solicitor.

They don't come cheap (we pay over £500 an hour)

If you want details then feel free to PM me

Rob

[James67]

I suspected that might be the case. Therein lies my problem, I can't afford that amount of money. And I can't afford to carry on with it, I know other franchisees who have paid the full amount owing just to get out early - and can't afford that either!
Thanks for the advice though - I appreciate that a good solicitor is probably the only option.

:(

[bwglaw]

I cannot advise without looking into your matter to ascertain whether you have a valid claim for misrepresentation. If you do, then you are entitled to bring a claim in the County Court. Your claim for damages would be based on any losses you have incurred, and quite possibly the franchise purchase price.

For a misrepresentation claim, virtually all lawyers should be able to deal with that for you, especially one that specialises in commercial law. I have yet to come across a lawyer that charges as much as £500/hour, which is an equivalent fee for Queen Counsel!

Jonathan

[Rob Holmes]

I have yet to come across a lawyer that charges as much as £500/hour, which is an equivalent fee for Queen Counsel!

Jonathan

They're one of the biggest (and allegedly the best) law firms in the UK that specialise in franchising (usually from the franchisors perspective)

I don't know if they are QC's or not but I assure you they exist. Maybe something to aim for Jonathan?

Rob

[bwglaw]

They're one of the biggest (and allegedly the best) law firms in the UK that specialise in franchising (usually from the franchisors perspective)

I don't know if they are QC's or not but I assure you they exist. Maybe something to aim for Jonathan?

Rob

I would never charge that much! Extortionate. This firm must be Clifford Chance, Linklaters or equivalent in London. Perhaps PM me the firm's name out of interest.

I have worked with a Partner that specialises in Commercial law and charges £190/hour, which is about right. I have not worked for any of the top 10 law firms, too competitive.

Queen Counsel's are actually senior Barristers, not solicitors. Cherie Blair is a QC and a part-time Judge. I am tempted to divert my vocation to be a Barrister because I appear to be good at drafting/analyising, which is what a Barrister does most. Will wait and see

[James67]

Ok, thanks to both of you, clearly a solicitor, whether specialised in Franchising or not, would need to see all the details before giving an opinion. To be honest, I want to avoid a court case and hope that the threat of court action would be enough to pursuade my franchisor to allow an aimiable separation. Even though I suspect I may have a case for damages I would be happy to just walk away and try and get on with my life.

Thanks again, I will consider my options carefully.

[Ian J]

Firstly I believed that they were a member of the British Franchise Association, as it said so on their invoices prior to my signing with them,

I'm not sure that you could use the notation on the invoices as a valid claim for misrepresentation dependant on what they were invoicing you for.

[bwglaw]

Firstly I believed that they were a member of the British Franchise Association, as it said so on their invoices prior to my signing with them,

I'm not sure that you could use the notation on the invoices as a valid claim for misrepresentation dependant on what they were invoicing you for.

I would have to disagree. It may not be the only factor to rely upon, but can be a contributing factor to show that the party was misrepresenting others.

[VeryMark]

Where are you James?

I can recommend one or two people who have reasonable hourly rates (i.e. about £180) but it would obviously be helpful for you to use someone locally.

Trading Standards might also be able to help if there's been a misrepresentation.

[Cornish Steve]

Would any lawyer be willing to take the case for free in return for a percentage of any award? It happens all the time here, although I understand the percentage is high (~50 percent).

[Ian J]

Firstly I believed that they were a member of the British Franchise Association, as it said so on their invoices prior to my signing with them,

I'm not sure that you could use the notation on the invoices as a valid claim for misrepresentation dependant on what they were invoicing you for.

I would have to disagree. It may not be the only factor to rely upon, but can be a contributing factor to show that the party was misrepresenting others.

Of course it could be a contributory factor to show that the company misrepresented themselves to James67 but according to his own post he based his belief on the fact that it said so on the invoices. In all likelihood whatever goods or services were provided by the franchisor would have been provided by the time the invoice was rendered which would serve to negate that argument.

My advice to James67 would be to arrange a meeting with a local solicitor (unless he lives in big city) as many of them offer a free initial consultation.

[Antonia @limeone.com]

We can help you with this as we offer qualified advice on legal issues for a fixed fee. Franchise misrepresentation is not uncommon and we have advised a number of clients on franchise issues.

I very much doubt that the BFA was the only reason the writer was attracted to the franchise and normally misrepresentation occurs in the pre joining sales material and subsequent 'promises'.

In any event, we can let you have advice and a plan of what to do to recover losses, not all of these cases end up in court.

[Deep Moat]

Hi gents, I'm hoping to win a missrep case against a franchisor, and would like to hear from anybody who has gone right down the road and what their experience was.
I'm at the stage where the gloves are well off, and there is no going back, but any tips, are greatfully received and confidentiality understood.