Legal Question in Business Law in Florida

Customer List

I own a small tech franchise and was the first to open in my state. The franchisor said I could service customers outside my territory so long as no other franchise owned those zip codes. A new franchise has opened in some zip codes that I used to service. Can the franchisor now force me to turnover my customer list to the new guy for FREE? Importantly, my contract doesn't say anything about this; it just says I have to stay out of another franchisee's territory. Fine. But the franchisor issued a policy after I bought my franchise saying that we have 90 days to turnover our customer lists to new franchises. It's totally silent on whether we get paid. I didn't even know about this policy until last week, when the new franchise owner sent me an email about getting my customer list. My contract also says I have to receive ''actual'' notice of new policies. I don't think posting on the website constitutes ''actual'' notice. This customer list is my most valuable asset and I don't expect to fork it over for FREE! I'd welcome any advice/suggestions on how to handle this issue. Thanks much.


Asked on 7/27/08, 9:20 pm

3 Answers from Attorneys
Jef Henninger, Esq Law Offices of Jef Henninger, Esq.

Re: Customer List

You seem like a pretty smart guy that hooked up with a franchisor that may be more interested in selling franchises than helping the current ones succeed. I suggest you get an attorney and establish a good relationship with him or her. Every business should have one. You can keep the attorney on retainer and use him or her for problems like this one. The attorney can send the franchisor a nasty gram which will likely scare them into working this out in your favor as no one wants litigation.

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Answered on 7/27/08, 9:43 pm
John Corbett Corbett Law Firm LLC

Re: Customer List

A lot depends on what your franchise agreement (the one you signed) says about territories, changes, and dispute resolution. I think that your intuition is correct, however in that it is not reasonable for you to develop business for no compensation nor is an undisclosed change to the agreement without compensation normally enforceable. That said, franchisors wield a lot of power and a fight can poison the well.

For the moment, you are in the driver's seat because you have information that they want. I suggest that any resolution needs to be accompanied by an written agreement. How the franchisor responds to your demand for payment will tell you a lot about the way that you will need to proceed.

To say more, I would need to know more about the details and would need to review your franchise agreeement. My firm handles matters of this type. If I can be of further help to you, call or email.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 7/28/08, 9:38 am
Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)

Re: Customer List

Franchise Agreements are contracts. Both the Franchisor and Franchisee are bound by the contract. In order to determine your rights and obligations, you need a good business atorney to read the Franchise Agreement and documents.

You may have to turn over the information (leads outside the territory.) On the other hand, you may have rights to compensation and the Franchisor may have to offer the territory to you.

You need to get a good business lawyer to review this is detail and to help you make your business more successful.

I hope this helps!

Ron Cappuccio

http://www.BusinessEsq.com

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Answered on 7/28/08, 10:10 am


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