Legal Question in Business Law in Massachusetts

Franchise law

My franchisor is using local advertising funds to help grow the company. Not what is outlined in the franchise agreement. They are now making all franchises sign a new program ''what thney call it, not an amendment to the agreement''. Raising the national adv fee from 1% to 2% and making us spoend 3% locally. If we do not signthis program, we will be billed the max are franchise agreement alows for local advertising plus 1% nat adv.

The biggest problem is when they first started billing for coop(local advertising), they never did any, than they misaprpriate the funds, after they are caught not spending the funds. Shouls i arbitrate like the agreement states???

Od contact ftc


Asked on 7/15/08, 1:10 pm

2 Answers from Attorneys
Lawrence Graves Coolidge & Graves PLLC

Re: Franchise law

You should consult with a lawyer who is thoroughly familiar with the arbitration process; many litigation attorneys do not have experience in arbitration. As to the franchise agreement, the provisions relating to advertising ordinarily allow the franchisor great latitude. Bring the agreement to a lawyer for specific advice.

Best wishes,

LDWG

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Answered on 7/15/08, 1:33 pm

Re: Franchise law

Without knowing specifically the company and the amounts involved it is difficult to make a sound recommendation. Also any attorney would need to see the franchise agreement itself.

If they are billing you for services under the franchise agreement and not providing them, that is a deceptive business practice and may be fraud.

You certainly have the right to arbitrate the dispute if it is provided for under your agreement.

I would suggest you meet with a business attorney and discuss your options. The small amount of money it might cost could save you a great deal in the future.

Please feel free to contact me if you have more questions.

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Answered on 7/15/08, 2:21 pm


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