Legal Question in Business Law in Colorado

I am at the end of a ten yr. contract with a franchise (cleaning and restoration industry). They said that they cannot offer me a 10yr. renewal due to UFDD filings. They are asking me to sign a 1 yr. extension of the existing contract. They are based in Washing (state). Nothing in the contract (that I can find) gives them the right to arbitrarily change the terms to allow a 1 yr. extension. If I don't sign the 1 yr. extension, they are threatening to enforce the non-compete clause. How likely is it that the non-compete would be enforced? If I don't resign, they will not even have a presence in this territory.


Asked on 11/15/14, 12:26 pm

1 Answer from Attorneys
Robert Murillo Pivotal Legal Ltd.

You two can agree to an extension and that does not have to be a term in the franchise agreement. You can just agree to this mutually.

What is confusing is your statement about the non-competition terms. The non-compete must be a clause in the franchise agreement and they can exercise that regardless if you agree to an extension. Usually the non-compete starts upon termination of the agreement. So this threat makes no sense. Also, it does not matter if they have no current present location in the territory. They can just state that they plan to find another franchisee.

I strongly advise that you speak with an attorney with franchise expertise. Our office has drafted franchise offers and advised franchisees. Good luck and I hope you get some advice because your facts are unusual.

Read more
Answered on 11/15/14, 3:14 pm


Related Questions & Answers

More Business Law questions and answers in Colorado