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FAQ For Franchisees And Franchisors

Owning a business can be challenging, but navigating a franchising situation can be especially complex. The legal relationship between a franchiser and a franchisee is unique — and it’s important to understand the related laws as well as your rights.

Our franchise and distribution law FAQ can help you understand the common issues that affect franchises. Be aware that franchise law can vary according to the industry. For more questions, email Madigan, Dahl & Harlan, P.A., in Minneapolis. We serve clients nationwide.

I am a franchisee, but I want to leave the franchise. What are my options?

Franchises are very different from regular businesses. If you are ready to retire, change careers or move on to your next business venture, you will have to complete a specific process to terminate the franchise.

To terminate a franchise, you will need to provide the franchiser with written notice and your reason for termination at least 90 days before you leave the franchise. The reason for termination is an important part of the process, so it is important to understand which reason to select.

What can I do if the franchiser lied about aspects of the business?

As a franchisee, you take on the risks of business ownership and the initial investment. It is vital for franchisees to have clear and accurate information before joining the franchise so that they know the full extent of risks and rewards.

In Minnesota and several other states, franchisers cannot omit critical facts or lie through documents or other communications. Franchisers may also not misrepresent the filing status and registration of their business.

In court, you and your franchise lawyer can present any misrepresentation or failure to deliver on contractual promises. Franchise disputes can be complex, but you deserve to assert your rights if a franchiser has made a mistake or committed fraud. Deceptive practices may be criminal in nature.

What are my options if a franchisee has altered my brand or products?

Franchisers have the benefit of several laws that allow them to protect their valuable assets. These assets include intellectual property and trade secrets, brand standards and more.

If your franchisee is not compliant with your franchise agreement or has violated your rights, you may consult with a franchise attorney at 612-604-2000 regarding a lawsuit or other options to terminate the franchise.