What Happens When You Are In Disagreement With Your Franchisor?

The excitement at the time of buying the franchisee was running high, you had vetted the franchisor and had faith in your actions, and maybe for a while, everything was working out as you had hoped. But somewhere down the line, relations soured, and now you are at an impasse with your franchisor with the future of your company in jeopardy and in dire need of proper representation.

So, what happens now?

Discussing Terms with Your Franchisor

fizkes/Shutterstock: Discuss terms with your franchisor

Several ways can be undertaken to solve franchise disputes, but any option that we will tell you will depend on personal circumstances and the type of conflict that has arisen. For example, if you have received a notice with a deadline in tow, you will need to act quickly. There may not be enough time to evaluate many options as compared to a dispute regarding running operations.

• Renegotiate to Arrive at A Mutual Agreement

Indypendenz/Shutterstock: Renegotiate with a calm mind

A surprising number of arguments have been resolved by taking a step back and re-approaching the disagreement with a calmer mind and correct attitude. Sit down with your franchisor, and there may be a simple misunderstanding or miscommunication. Dragging out an argument and approaching the court is full of hassles and nobody’s first choice.

Understand that negotiation does not have to be conversations that take place only when both parties are physically present in a room. Transparent and clear discussions over the phone or a couple of emails are also beneficial.

It will be in your best interest to hand over the communication part to your lawyer as they are well-versed in the tricky art of negotiations. As a franchise owner, it is easy to lose calm in a critical situation, which may result in losing the upper-hand while talks are on.

• Alternative Dispute Resolution (ADR)

If the negotiations fail to generate a positive outcome, consider approaching ADR. For this, the franchise disclosure document will need to be revisited to ascertain what documents are required and submitted to mediation, or arbitration, or both. Certain agreements contain varying degrees of specifications in regards to location, fees, duration, etc.

• Litigation

imtmphoto/Shutterstock: Turning to a knowledgeable franchise counsel

Unfortunately, if none of the options are successful, you will have to seek franchise litigation, in case of urgent need of relief. An experienced and knowledgeable franchise counsel will be needed as there are many variables involved at this stage, and some things are best left to professionals. Be clear when communicating with your lawyer about the ideal outcome for you.

While this is certainly not an ideal situation for anybody, it is possible to come out of it unscathed. Revisit our provided solutions and apply them according to the case, which you know best.