Franchise termination.

[Kandee]

Hi all,
This is my first post, so will try to keep it short and straight to the point.
I invested into a franchise in November 2023, for a 5years contract.
Despite all my efforts of social media, face2face, leaflets, knocking on businesses...I HAVEN'T GENERATED A SINGLE PENNY...ALMOST A YEAR INTO THE BUSINESS.
Back in February/March this year, I have contacted the person in charge of the UK market (he is the one who signed me up for the Franchise), explaining my situation and asked the best way forward. I have not had any sales, marketing or even a 1-1 call to improve my situation. When I went back asking to terminate my contract, due to a lack of support and an evident "0 revenue", I have been told that the two areas I purchased can only be sold to a new person and there is no other alternative. That person is no longer answering my calls!
I DONT EVEN KNOW IF I CAN GET MY MONEY BACK AFTER THE 5YEARS?!
I paid the full amount for the two areas before getting the stock and having to do 2jobs to pay off loans and friends and family who kindly lent me some money at the time. Is there any other solution? I AM VERY MUCH IN NEED OF SOME GUIDANCE HERE!
Thanks

 

[fisicx]

Hi @Kandee and welcome to UKBF.

Without knowing the franchise it’s difficult to give good advice on your next steps but the likelihood is you won’t ever get your money back. There are good franchises but many more that are little more than scams.

 

[Mark T Jones]

The answer is likely to lie in your contract.

However, to break things into 2 parts:

1. Ongoing costs - are there any? If so suspend payment with immediate effect.

2. Historic costs - In reality it's likely you will have to use the courts to recover these (or at least head in that direction).

You will need:

• Full details of the entity you are dealing with (hopefully a Uk entity).
• Concise timeline of events.
• Evidence of any claims or promises made and of non-performance.

 

[WaveJumper]

Bit of a minefield area as mentioned above and as with most things there's good and bad, I believe this is a very under regulated business arena. Might be worth having a look on the BFA website they do have a help and advice section which maybe of some use.

British Franchise Association – Influencing Success in Franchising

www.thebfa.org

 

[Michael Gerard]

You need to employ the services of a solicitor who will then give you advice and inform what your options are once he or she has possession of all of the facts.

The contract that you signed up to will certainly be an area of focus, in particular the termination clause which should include grounds for termination, what obligations have been breached and whether the franchisor is in repudiatory breach.

What you must avoid doing is to do something that puts you in fundamental breach which would allow the franchisor to bring the contract to an end and pursue you for damages.