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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 70207
Experience:  Over 5 years in practice
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Good Morning Please advise with regards XXXXX XXXXX a simple,smooth,

Customer Question

Good Morning

Please advise with regards XXXXX XXXXX a simple,smooth, clean break letter as a franchisee to my franchisors.What legal terms/phrases should I include, to support our position and to end this matter. (I cannot afford the monthly fees and costs and the franchisors are not fulfilling their part,the previous franchisee is still trading and has taken the territory bookings and monies, six businesses up for resale and older franchisees are walking) In spite of the reality of the franchise, I would just like to legally,prepare the following points in a letter and walk away too.

The business is a wedding venue styling/hiring linen and centrepieces franchise.

I would like to cease trading and have no further bookings or income from the business and I am happy to handover the stock bought with the territory and the additional stock bought during the 18 months of trading with the business, to the franchisors.

On the condition that the territory value £11,994 and the stock value £5,500 should be used to fulfill the two now outstanding franchise monthly management fees of £708 and any other cost incurred, by this territory and including the cost to have the stock couriered, from the territory/franchisee to the franchisor.

Finally once the handover and agreed clean break date have been set, the franchisor will cease to invoice the franchisee for the monthly management fee and release the franchisee from their liabilities under the franchise agreement.

Thank you
Ms P Williams
Submitted: 3 years ago.
Category: Law
Expert:  Jo C. replied 3 years ago.
Hi.

Thank you for your question. My name is XXXXX XXXXX I will try to help with this.

Do you have a house and is there any equity in it?

Do you have any other assets?

Have you discuss this with the franchisor?
Customer: replied 3 years ago.

Hi Jo


 


Thank you for your request. I have sent a brief letter asking for a clean break, two weeks ago. In reply they are wanting the stock and the territory, however they are dishonest and are looking to profit from this. Instead of being supportive and acknowledging that, I have been misled and that the territory, bookings, monies and venues are still held by the former franchisee, who set up a competing business while advertising the business for sale.


 


The franchisors are also running a 'cowboy outfit'. There is no integrity there and the managing director behaves like a 'a boarding school mistress'.


 


The fees are unreasonable and they are aware of that. It's a case of them not wanting to take their responsibility and they are not supportive. I am unable to deal with the level of unprofessionalism, the constantly changing restrictions and demands.


 


A letter with no loopholes or comebacks is the only option. Offering the stock should more than financially cover any costs.


 


Thank you Elise


 


 

Expert:  Jo C. replied 3 years ago.
How long does the franchise have to go before you could leave legitimately?

I still need to know whether you are the house and if there is any equity in it and whether you have any other assets because that will affect in the long term how you deal with this.

What is the wording whereby they say they want the stock in the territory. Are they saying that provided you give them all of that they will let you walk away?
Customer: replied 3 years ago.

Hi Jo


 


Yes another 3 and a half years with them.


 


Yes 'will from the agreed date cease to invoice for the fee and release the franchisee from their liabilities under the franchise agreement. A deed of termination to formally terminate the franchise agreement will be executed by the franchisor and the franchisee'


 


I have no equity, have lost that in the divorce, traded it for the children. We are renting.


 


How do we legally draft this letter, so that there are no loopholes and they do not try to take or invent any more costs and ensure that they acknowledge that the territory and stock, more than cover the monthly fee and any costs incurred if any, during this process.


 


Thank you Elise

Customer: replied 3 years ago.

Hi Jo


 


Just checking in for a reply, I have to send this off by midnight tonight or call and ask for extension for reply, which I'm wary of doing. It's stressful and I'm trying to get it sorted today.


 


Thank you


Elise


 


 

Expert:  Jo C. replied 3 years ago.
Thank you.

The reason I ask about your house is that if they start to become difficult at some stage in the future you can tell them that you are no house and no assets, you live in rented accommodation and that if they are insistent on enforcing this through the court, you will simply make yourself bankrupt. I will leave it up to you as to when you choose to mention that to them.

Write to them in the following terms. Mark the letter at the top in the heading “without prejudice save as to costs which means that they cannot produce it as any kind of admission that you owe them any money at all.

I am writing to give you notice to terminate my franchise with effect from and then give the particular date after which you will no longer be trading.

Tell them that you are prepared to give them the stock and execute a deed of surrender provided that they agree that they will not pursue you for any outstanding fees or any future fees and that they will be responsible for the legal costs of preparing the deed of surrender.

Attached to it a list of the stock that you are prepared to let them have and anything else which you are prepared to let them have.

Tell them that if they are in agreement to send a deed of surrender to you for execution.

At that stage, you do need to get a solicitor to briefly look at the deed to make sure that you are not being conned in any way.

Jo
Jo C. and 2 other Law Specialists are ready to help you
Customer: replied 3 years ago.

Hi Jo


 


What is the difference between the deed to surrender and the termination deed


 


thank you Elise

Customer: replied 3 years ago.

Hi Jo


 


What is the difference between the deed to terminate and the deed to surrender


 


Thank you Elise

Expert:  Jo C. replied 3 years ago.
It is just semantics as the effect is largely the same depending on the contents.

Legally, surrender is when you give it up and determination is when they terminate you.

It should be called a deed of surrender.

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