Legal Question in Business Law in Maryland
Business - gas station
My father along with his brother own a franchise gas station that was just recently closed down by the company that owns the franchise. They along with various other family members invested enormous amounts of money into the business. The company has so far made no indication that they will be returning the money that was put into running and maintaining the business. What should we do, as owners of the gas station to ensure that our money is returned to us? Also can the company that owns the franchise simply just close down and take our business, not to mention our income away?
2 Answers from Attorneys
Re: Business - gas station
It depends on their franchise agreement - the contract. Of course, most favor the franchiser; it would've been a good idea to have an attorney review it prior to signing. Hindsight is always 20/20. You should tell your father that now is definitely the time to call an attorney.
1. Someone needs to review the contract and determine whether there has been a breach.
2. Someone may need to file a lawsuit if there has been a breach.
3. Someone may need to advise your father of all his legal rights and responsibilities.
Now is not the time to figure this out yourself. Not if your family's livelihood is on the line.
Misty
Re: Business - gas station
You would have to consult your franchise agreement to determine if the franchisor acted within its rights in terminating the agreement and closing your business down. Typical such agreements vest great power in the franchisor, which is not surprising since they are the ones who create the franchise documents. If you were not in violation of the agreement, and were meeting your minimum revenue requirements, you could challenge their actions, either in court or an arbitration proceeding if the franchise agreement calls for this method of dispute resolution.
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