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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Franchise fees and expenses claim back

Resolved Question:

I've got a legal query regarding my right to claim back all franchise fees and expenses I have incurred as I feel cheated with empty promises and lies by an individual I made contact with online who convinced me to invest in his franchise. I feel the only intention from this "franchisor" was to take all the money he could with the least regard on whether the franchisee is actually successful or not or if the franchisee actually makes any money or not. I was left with very little financial resources to fight this individual in court and claim back my money...please read below a summary of the case:


 


I have signed a franchise agreement on the 11th September but I confess I had no previous experience or knowledge of common mistakes and rules associated with franchise agreements, therefore I have trusted the figures and details presented to me by the franchisor.
I paid all franchise fees through cheque enclosed and posted to the franchisor in Bournemouth but things started going wrong from day one of training as I realised the number of days of training I was told about did not match with the number of actual days the trainer said he was to spend with me. Likewise, I was forced (meaning with no option to choose) to invest in merchandise which later I later found to be useless and had to wait roughly over 5 weeks to get a refund on the value of that same merchandise (after insisting with the franchisor) which led to increasing my negative balance right at the start of the business.
The training, as mentioned above, did not last the time I was told at the time of signing the agreement nor did it cover all the areas I needed to be trained on.
I did write to the franchisor in more than one occasions and told him of my disappointment and discontent but he brushed me away and just told me to carry on.
On another hand, the profits and earnings revealed by the franchisor did not match to the reality, not even by far; the franchise basically consisted on the acquisition of 40 vending machines selling confectionery (Mars products) that were to sell in pubs, coffee shops, etc... I was told of earnings around 1600pcm for the initial 40 vending machines I bought but that could not be farther from the reality. Not only could I not manage to find suitable places to fit all 40 machines as the ones fitted (about 16) only generated an income of less than 60GBP after 4 weeks of being in the site.

Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.
Alex Watts : How much have you incurred in costs please?
Customer:

Hello Alex, I have a negative balance overall of over 12000GBP, amount which includes the franchise fees of 9950GBP.

Alex Watts :

How much do you attribute to them? The whole amount of £9950?

Customer:

I attribute to them the franchise fees of 9950GBP plus VAT paid at rate of 20%...that is how I come to almost 12000GBP of negative balance.

Customer:

I was told I should expect an income of around 1600GBP per month on average from the initial 40 machines...on the franchise agreement it was determined that their "experienced on-site telesales team" would procure the sites for me to fit the whole 40 machines...it has been almost two months since I am in business and have only fitted 16 machines from the initial 40...and the profits (on a pro rata estimate) are about 20% of their promise. Also, I am gutted that their on-site telesales team is actually out of London and have been providing me with a dreadful list of inadequate sites. I have contacted the franchisor on this matter and others that I feel cheated for but he just dismissed my claims and told me to follow the advice on the mugs and cushions "keep calm and carry on"...clearly mocking me!

Alex Watts :

You need to write and set out your losses and request a refund within 14 days or say you will go to Court within 14 days. You should make sure you send this recorded delivery and keep a copy.


 


If they do not refund you then you can issue proceedings in the County Court. You can either do this online at: www.moneyclaim.gov.uk or by completing form N1 http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf and take it to your local County Court.


 


The Court will then issue a claim which a copy will be sent to the Defendant who will have a limited time to defend it, if not you can enter Judgment and enforce.


 


If the matter is defended it will be set down for a trial. If the claim is for £10,000 or less it will be a small claim and you will not need representation.


 


Can I clarify anything for you about this today please?

Customer:

What are my chances on this case, according to the details I have provided you with?

Alex Watts :

I think above 50% which is all you need in Court.

Customer:

Will I be able to get my money back given the reasons I have presented or do you think these reasons are not strong enough to make a claim of this nature?

Alex Watts :

If the Judge finds in your favour - yes.

Customer:

ok, thanks for your time.

Alex Watts :

If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.


Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.


 


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