A franchise agreement can be beneficial for all parties involved. However, there are often disputes between the franchisor and the franchisee. Closely reviewing the agreement before you sign can help prevent disagreements. Here are some examples of franchise disputes.
The most common disagreement is when one side accuses the other of a breach of contract. The franchise agreement sets forth each party’s rights and obligations. In some cases, the franchisee believes that the franchisor is not taking the necessary steps to promote and market the business. The franchisor may accuse the franchisee of not upholding the standards of the business. The franchisee must follow uniform standards to maintain the reputation of the franchise.
The franchisor may also disagree with how the franchisee is using the intellectual property. Franchisors vigorously protect their own intellectual property, as they have invested a significant amount. They may take issue with how the franchisee is advertising or using the franchise name.
Franchisors may also claim that the franchisee is not meeting the economic investment necessary for the franchise. Each agreement requires a minimum outlay for certain functions.
Franchise disputes do not always mean that litigation is imminent or necessary. The two parties can negotiate and attempt to resolve any disagreement. The franchise agreement may also specify how a dispute is handled. For example, the franchise agreement may require mediation between the party or mandate that any disagreement goes to arbitration instead of being taken to court. You should always consult a lawyer when you are involved in a disagreement, whether you are the franchisor or franchisee.
Contact a Miami Business Disputes Attorney Today
Attorney Daniel D. Diaz works with businesses when they are involved in disagreements that relate to contracts. To speak with an experienced business litigation attorney, you can send us a message online or call us today at 783.356.2299.
