How to Take Action for Franchise Agreement Violations
Compile your evidence., Consider consulting an attorney., Draft a demand letter., Send your demand letter., Evaluate the response.
Step-by-Step Guide
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Step 1: Compile your evidence.
Before you contact the other party regarding the franchise agreement violations, you must have documentation of the violations that are taking place and a good idea of how you want the matter resolved.If you have any evidence or documentation that the other party is violating the agreement, address the matter immediately rather than letting it build.
Keep in mind that matters tend to be resolved more easily if they are addressed when they are small, rather than waiting until the violations become more entrenched and substantial.
Give some thought to how you'd like to see the problem resolved.
If you've caught the violation early, you may simply want the behavior corrected so the violation doesn't continue.
For example, if you've learned that your franchisee is using sub-standard food products, or products obtained from an unacceptable distributor, you can remedy this violation by pointing them to the acceptable food products or distributors and requesting they switch immediately. -
Step 2: Consider consulting an attorney.
While you can certainly draft your own letter providing the other party with notice of their breach of contract and demanding a resolution to the problem, a letter coming from an attorney may be taken more seriously.Hiring an attorney at this stage also may be preferable if you anticipate the other party will not react favorably to the letter, and you may have to file a lawsuit to get the matter resolved.
An attorney can analyze the situation and present your options under the law to remedy the situation, as well as clarify whether the other party's actions amount to a substantial violation of the franchise agreement.
Typically you can use a business transactional attorney to draft the letter.
However, if you anticipate litigation you should look for someone who specializes in franchise litigation. , A relatively brief, fact-based letter written in standard business format should communicate to the other party the ways in which you believe they have violated the franchise agreement and how you want the issue resolved.Maintain a cordial, professional tone, and stick to the facts.
Begin your letter by referring to the franchise agreement and specifying the clause you believe the other party has violated.
Summarize the facts that constitute the violations, and explain how you'd like these violations addressed.
If you intend the letter to satisfy any "notice of breach" requirements sent forth in the franchise agreement, state this specifically.
Give the other party a firm deadline to respond to your letter.
A week to 10 days from receipt typically is enough time.
Don't measure your deadline from the date you sent the letter, as this can be unfair to the other party if delivery is delayed for some reason.
Let the other party know what your next step will be if the violations aren't addressed promptly. , After you've finalized and proofread your letter, print it off and sign it.
Make a copy of the signed letter for your records and mail the original signed letter to the other party using certified mail with returned receipt requested.Don't send your letter using email, because you won't have any idea when the other party receives it.
You may need this information later if you decide to file a lawsuit and need proof that you attempted to remedy the situation before filing a lawsuit.
When you get back the green card letting you know that your letter was received, mark the date of your deadline on your calendar.
Make a copy of the green card and keep both with your copy of the letter and copies of the franchise agreement itself. , How the other party responds to your letter will determine what your next steps need to be.
You may be able to meet with them and work out a mutually acceptable solution together without any further complications.Keep an open mind that the violation may have been the result of a simple misunderstanding that is quickly and easily remedied.
At this stage, you do yourself a favor by being flexible and willing to work with the other party to find a solution to the issue.
Keep in mind that resolution has cost you nothing but postage.
If you come up with a solution to your dispute, make sure you get the terms in writing – particularly if it involves a promise from the other party to take actions or to stop doing something that violated the agreement.
Any new promises or changes you make to the original franchise agreement as a result of your negotiations must be in writing and signed by both parties if you intend them to be legally binding or to alter the terms of the original written agreement.
Work with the other party to come up with a cost-effective solution.
For example, if your franchisee is using an unacceptable vendor to supply food products, but they have signed a months-long contract with that vendor, you might be able to work with them to terminate that contract early and find a new supplier. -
Step 3: Draft a demand letter.
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Step 4: Send your demand letter.
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Step 5: Evaluate the response.
Detailed Guide
Before you contact the other party regarding the franchise agreement violations, you must have documentation of the violations that are taking place and a good idea of how you want the matter resolved.If you have any evidence or documentation that the other party is violating the agreement, address the matter immediately rather than letting it build.
Keep in mind that matters tend to be resolved more easily if they are addressed when they are small, rather than waiting until the violations become more entrenched and substantial.
Give some thought to how you'd like to see the problem resolved.
If you've caught the violation early, you may simply want the behavior corrected so the violation doesn't continue.
For example, if you've learned that your franchisee is using sub-standard food products, or products obtained from an unacceptable distributor, you can remedy this violation by pointing them to the acceptable food products or distributors and requesting they switch immediately.
While you can certainly draft your own letter providing the other party with notice of their breach of contract and demanding a resolution to the problem, a letter coming from an attorney may be taken more seriously.Hiring an attorney at this stage also may be preferable if you anticipate the other party will not react favorably to the letter, and you may have to file a lawsuit to get the matter resolved.
An attorney can analyze the situation and present your options under the law to remedy the situation, as well as clarify whether the other party's actions amount to a substantial violation of the franchise agreement.
Typically you can use a business transactional attorney to draft the letter.
However, if you anticipate litigation you should look for someone who specializes in franchise litigation. , A relatively brief, fact-based letter written in standard business format should communicate to the other party the ways in which you believe they have violated the franchise agreement and how you want the issue resolved.Maintain a cordial, professional tone, and stick to the facts.
Begin your letter by referring to the franchise agreement and specifying the clause you believe the other party has violated.
Summarize the facts that constitute the violations, and explain how you'd like these violations addressed.
If you intend the letter to satisfy any "notice of breach" requirements sent forth in the franchise agreement, state this specifically.
Give the other party a firm deadline to respond to your letter.
A week to 10 days from receipt typically is enough time.
Don't measure your deadline from the date you sent the letter, as this can be unfair to the other party if delivery is delayed for some reason.
Let the other party know what your next step will be if the violations aren't addressed promptly. , After you've finalized and proofread your letter, print it off and sign it.
Make a copy of the signed letter for your records and mail the original signed letter to the other party using certified mail with returned receipt requested.Don't send your letter using email, because you won't have any idea when the other party receives it.
You may need this information later if you decide to file a lawsuit and need proof that you attempted to remedy the situation before filing a lawsuit.
When you get back the green card letting you know that your letter was received, mark the date of your deadline on your calendar.
Make a copy of the green card and keep both with your copy of the letter and copies of the franchise agreement itself. , How the other party responds to your letter will determine what your next steps need to be.
You may be able to meet with them and work out a mutually acceptable solution together without any further complications.Keep an open mind that the violation may have been the result of a simple misunderstanding that is quickly and easily remedied.
At this stage, you do yourself a favor by being flexible and willing to work with the other party to find a solution to the issue.
Keep in mind that resolution has cost you nothing but postage.
If you come up with a solution to your dispute, make sure you get the terms in writing – particularly if it involves a promise from the other party to take actions or to stop doing something that violated the agreement.
Any new promises or changes you make to the original franchise agreement as a result of your negotiations must be in writing and signed by both parties if you intend them to be legally binding or to alter the terms of the original written agreement.
Work with the other party to come up with a cost-effective solution.
For example, if your franchisee is using an unacceptable vendor to supply food products, but they have signed a months-long contract with that vendor, you might be able to work with them to terminate that contract early and find a new supplier.
About the Author
Michelle Perry
Creates helpful guides on cooking to inspire and educate readers.
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