Legal Question in Business Law in Nevada

Franchise Law

We purchased a franchise. Original company had track record, name recognition, etc. Owner of corporation lost the right to the name, and all trademarks of the company in his divorce. Corporate now says they will pay for all new signs etc., however we will have to sign a new franchise agreement with a totally different name, etc. Are we entitled to our franchise fee back because the name recognition and branding of the company will no longer exist? Corporation is in Texas, we are in Nevada.


Asked on 2/02/07, 9:11 am

1 Answer from Attorneys
Jeffrey Cogan Law Offices of Jeffrey A. Cogan, Chartered

Re: Franchise Law

Yes, I think that this will be a material breach of the contract. What we would have to show is that the initial franchise fee was intended for a long time so that you are now damaged since the new name doesn't have the same value as the old one.

I believe that if the ex-wife, who know owns the name is threatened with a law suit and possibly having to return a portion of the franchise fee, she might be willing to allow you to use it.

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Answered on 2/05/07, 8:08 pm


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