Legal Question in Civil Litigation in California

Re: Can a Franchisor unfairly reject a prospective franchisee?

Not really sure, but I believe that they can.

Re: Can a Franchisor unfairly reject a prospective franchisee?

Absolutely! I need to know more about the circumstances of your rejection. You also need to look at closely at their UFOC. Please take a look at my site at www.lawyers.com/amyghosh. www.attorneyadvise.com

Re: Can a Franchisor unfairly reject a prospective franchisee?

I'm not sure what you mean by "unfair" here. Parties who have already entered into a contract have duties of good faith and fair dealing toward one another, but this is not the case where no contract exists yet. The law does not compel people to enter into contracts, even when the proposed contract seems more than fair.

The franchisor is not required to grant franchises at all, and can reject proposed franchise agreements for just about any reason. Your question specifically says that the reason for the rjection was not "race, etc.", so I don't see how the rejection could be illegal.

Besides, what seems "unfair" to the potential franchisee isn't necessarily unfair to the other parties involved. If there are other franchisees in the area, the franchisor would have good reason to reject even the most qualified franchisee in order to avoid undermining the existing franchise operations. In fact, the franchisor's fiduciary duty to the existing franchisees would likely require that it reject the new proposal, no matter how unfair this might seem to the rejected party.