Legal Question in Business Law in California

If it is under $5,000, you file a small claims action. Depending on if you are a sole proprietor and other factors you may qualify for small claims up to $7,500. Above that you have to file in Superior Court. The other alternative is to turn it over to a collections agency.

As a Franchise Attorney I only add the following. Sometimes, a well-written demand letter that threatens a lawsuit is enough to get the other side to pay. Also, is there an underlying contract and does it have an attorneys fee clause? These factors can up the negotiating ante considerably. Consult with a good business or franchise attorney in your area for specific advice and cost to write a demand letter.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation