Can a franchisor shut down an independent business after there is a termination of my franchise agreement?

A: If you were doing business as a franchisee in New York, and your franchisor has terminated your formal franchise agreement, then YES, they may shut down your independent business. This is because generally, a post-term covenant-not-to-compete is included in a franchise agreement. This covenant states that upon termination of the franchise agreement, a franchisee may not operate a similar type of business. This non-compete restriction is usually for a period of 2 years within a certain geographic location. 

Therefore, when the termination of a franchise agreement is valid and enforced, a court will generally uphold this type of non-compete agreement.

However, there may be ways around this type of non-compete agreement. With the help of a New York franchise lawyer, you may argue that your independent business is now different than before. For example, if your franchise in New York was in the business of selling hamburgers, you may go into the business of selling chicken sandwiches. If you do so, in a court of law, your New York franchise lawyer may be able to prove that you have no conflict of interest with your former franchisor.

Generally, these rules of non-compete depend on the state that the franchise is in. Therefore, if your franchise agreement has been terminated in the state of New York, you should get the professional help of a New York franchise lawyer. Your New York franchise lawyer can investigate the termination of your franchise, and advise you on ways that you may proceed with an independent business.

Contacting a New York Franchise Lawyer

If you are an entrepreneur who is interested in franchising your business there is a lot you need to know, including the significance of evaluating your trademark and how to approach the preparation of your FDD. For a limited time, get New York franchise lawyer Charles N. Internicola, Esq's franchise law report to determine whether or not your business is right for franchising. Contact us today at 1-800-976-4904 for more information about Mr. Internicola's franchise law services in New York and how he assists entrepreneurs franchise their business nationwide.

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