Legal Question in Business Law in California
i just signed a franchise agreement in the state of CA- today. Do I have any period of time to opt out - cancel the agreement? I have not yet sent consideration to the franchisor - just my signautues.
I found out some information that is making me now doubtful - but not misrepresentation on the part of the franchisor.
3 Answers from Attorneys
The 3 day right to rescind is typically for home solicitation consumer contracts. You may still rescind if the other party has not formally accepted the contract, and if there is no detrimental reliance by them on witnessing and relying on your signature and that they started to spend money. You should give formal written notice of your desire to Rescind the Contract.
The State of Cakifornia also has some fairly strict rules on how franchises may be offered, what must be disclosed, etc. If the franchisor won't let you out of the contract, you should check to see whether the franchisor followed all the rules.
As a Franchise Attorney specializing in this area of law for 30-plus years, I can say the following.There is no time period to opt out; instead franchise regulations require them to wait 14 full calendar days (with signing on the 15th calendar day) from the time they provided you with their FDD Franchise Disclosure Document before the contract is signed or any money changes hands. Beyond that, if everything was not disclosed propertly in their FDD, you may be able to rescind the contract. Consult with a good franchise attorney for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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