Legal Question in Business Law in California

Re: Can I copy someone's business idea if they have no franchise?

Well, you have been placed in a tough position and I certainly cannot predict how it will turn out. However, let me give you a few general tips.

First, people make expenditures of time and money to research business opportunities all the time, and probably over 90% of those researched ideas have to be abandoned. If you have to give up the idea of going into this business, that's a disappointment and maybe an expensive one, but you have lots of company.

Second, franchising a business is highly regulated. Anyone who sells franchises has to make an application and obtain approval from the state. Your aunt and partner probably didn't break the law by just talking about franchising their business, but if they induced you to act in the expectation that you would receive a franchise, and at the time the franchise opportunity wasn't registered, that could be another matter. I mention this mainly to point out that a business has to jump through some hoops before it can franchise itself to others.

Third, you can be sued and thus forced to incur costs (and time) to defend yourself even when the other party's case is no good. Litigation costs are especially high in the intellectual property area, which includes trade secrets.

Fourth, an attorney with appropriate experience would have to advise you as to whether the things you call 'trade secrets' actually are the kind of information that is protected. For example, customer lists are often 'trade secrets' even when it's pretty obvious who the prospects are. On the other hand, recipes, concepts for ways to do business, etc. aren't protected nearly to the extent that some people think.

Finally, calling the property manager and telling her not to rent to you may be an improper interference with your economic interests for which you could bring a lawsuit.

If you are still considering this business, you should consult with a business attorney regarding incorporation, franchise law, trade secrets law, and the tort called malicious interference with propsective economic advantage.