Legal Question in Business Law in California

Franchise Rescission

I own two franchise territories for a service based franchise. I have two claims against the franchisor. The first claim revolves around unfair competition and disclosures and applies to both territories. The second claim revolves around denying the consent of a buyer for the the second territory. My questions are: If I seek recsission on both, and serve the franchisor with a notice of recsission, does that waive may claims related to the denied consent? Does the same filing mean I have to continue to perform under the agreement? If I do not perform, am I in breach of contract? I understand that the cause of recsission and the amounts of damages, actual and consequential, are the dispute. The franchisee is located in CA and the franchisor is located in PA. We have set a date for mediation, however, I have been advised that the larger claim will come from recsission rather than the damages from the competition and disclosure.


Asked on 1/30/09, 2:07 pm

4 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

Re: Franchise Rescission

The only way you're going to get any meaningful and informed opinion/advice is to sit down with experienced counsel, who will be able to provide it to you only after reviewing all the contracts, documents, facts, legal issues, etc., with you. You can not get 'legal advice' here; that would be against the legal ethics rules to provide it to non-clients. At best, you are getting only 'helpful hints', based on insufficient scraps of information. I don't have enough information to be able even to give you a hint.

Your faith is misplaced if you think you can take a few such uninformed 'hints' and be effective in handling complex legal claims, disputes, pleadings, evidence, motions, and other matters leading up to mediation hearing or trial. You didn't trust or use the 'advice' you already got. How are you going to decide between, or use, other conflicting 'free advice'?

If the case is set for hearing in SoCAL, and if you are serious about getting legal help, feel free to contact me. If the case is worth pursuing, it is worth doing it right and professionally.

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Answered on 1/30/09, 2:35 pm
George Moschopoulos The Law Office of George Moschopoulos

Re: Franchise Rescission

As Mr. Nelson has already pointed out, this is not the ideal forum from which you will get meaningful advice on a complex matter which has already progressed to the advanced stage of mediation. Hire an attorney with whom you feel comfortable. If you would like a second opinion, feel free to contact us.

Best of Luck!

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Answered on 1/30/09, 4:24 pm
Daniel Bakondi The Law Office of Daniel Bakondi

Re: Franchise Rescission

You will lose much more in lost rights and money than an attorney will cost if you do not hire one. Deciding between whether to sue on a contract or rescind is a very complex and delicate matter. You want to prevent yourself from making bad decisions which cost you your rights and money, and that is why you must hire an attorney. An attorney needs to look over your agreements, apply the law and strategy, and make a decision with you about how to proceed. Let me know if you want my help.

Best,

Daniel Bakondi, Esq.

IMPORTANT:

No attorney-client nor confidential relationship is created through this communication. You may not rely in any way on this communication, and nothing herein constitutes legal advice nor legal opinion. Your issue may be time sensitive and may result in loss of rights if you do not obtain an attorney immediately.

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Answered on 1/31/09, 4:33 am
Daniel Harrison Berger Harrison, APC

Re: Franchise Rescission

Rescission is unwinding the deal, putting the parties in the position they were in prior to contracting. You can only get rescission in a few instances, such as with fraud in the inducement, mistake of fact, etc.

To properly advise you, and to ensure you don't assert a position that will come back to haunt you, I would need to review your franchise agreement and related documents. Everything starts from there.

Let me know if I can be of further assistance.

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Answered on 2/03/09, 5:02 pm


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