Legal Remedies for a Franchise Dispute (Part B)

Legislative Solutions to a Franchise Dispute

State franchise registration/disclosure laws and state franchise relationship laws have been enacted to establish a minimum level of acceptable franchisor behavior. Besides regulating the franchise relationship and the resolution of a franchise dispute, these laws are especially written to protect against the termination of a franchise relationship.

Fifteen states have adopted laws to regulate the offer and sale of franchises. These laws also usually require:

• the registration of a franchise offering with the appropriate state administrator;
• that a disclosure statement is provided to potential franchisees;
• that certain financial matters are properly disclosed; and
• that civil and criminal remedies exist if state statutes are violated.

There are also federal laws that apply to a franchise in New York. However, even with legislative support, litigation can be difficult for an individual franchisee. In a franchise dispute, the franchisee may be in a difficult financial position, and may have to choose either making a royalty payment or hiring a New York franchise lawyer.

If the franchisee pays only their New York franchise lawyer, and not their royalty payment, they may be in default of the franchise agreement, which may give the franchisor a credible basis for retaliatory termination. Furthermore, if a franchise dispute is based upon oral exchanges between the parties, these exchanges may not be admissible as evidence in a dispute.

One avenue that a New York franchise lawyer may explore is whether there are other franchisees with similar complaints against the franchisor. If so, an action on behalf of multiple franchisees can put more pressure on the franchisor.

For a limited time, get New York franchise lawyer Charles N. Internicola, Esq's "An Entrepreneurs Guide to Purchasing a Business or Franchise". 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 franchisees nationwide.

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