Legal Question in Business Law in California

Re: Breach of contract by franchisor

You have to file a complaint for fraud. Clearly they stole your money. They sound like they are about to file for bk and then, the only way you will survive, is if you file a complaint for fraud in the bk court.

Good luck - that's a tough situation.

Re: Breach of contract by franchisor

In addition to, or instead of, filing a general complaint for fraud, I would recommend having an attorney investigate whether the franchisor has violated any of California's laws govering registration of franchising businesses and franchisor financial practices. This would require knowing the name of the franchisor and of course you can't disclose that on LawGuru, but there is a possibility there's something here the Attorney General's office would handle, or want to participate in handling.

Re: Breach of contract by franchisor

You probably don't; they are going BK, which may take you there as well. You can file and pursue a fraud and breach of agreement Claim in their BK, but unless they have substantial assets the BK Trustee takes control of, it is unlikely you'll receive much from it. If they had substantial assets, they wouldn't be going BK. Sorry.

Re: Breach of contract by franchisor

It's difficult to help without knowing more about the franchise agreement and the business that you hope to be in. I can say that there is a certain urgency in getting the problem resolved. If you believe that there is a possibility of a pending bankruptcy you may find that your intuitive business sense is not of much help. You should therefore consult with a lawyer who will have the opportunity to understand the specifics of your situation.

My firm handles matters of this type. If I can be of further help to you, call or email.

See also: http://info.corbettlaw.net/lawguru.htm