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Ask Jo C. Your Own Question
Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 70648
Experience:  Over 5 years in practice
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I own a franchise

Customer Question

I own a franchise with two areas with two separate contracts. now I have signed the first contract in 2010 and brought and paid for the second area in 2011. I received but never signed the second contract. Ive been asked to sign it after 4 years but want to sell and leave should I sign it.

Submitted: 2 years ago.
Category: Law
Expert:  Jo C. replied 2 years ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
How long does it lock you in for?
Customer: replied 2 years ago.

10 years which a 10 year option

Expert:  Jo C. replied 2 years ago.
Ok. Does it seek to prevent you leaving?
Expert:  Jo C. replied 2 years ago.
Or more specifically selling?
Customer: replied 2 years ago.

it prevents me from leaving as they could claim lost revenue but I can sell the business but they have final approval.

It would also attempt to prevent me working independently in the area. Also it would allow them to breach my contract for whatever reason they had.

Could I claim my money back from them as I have not sign the contract and they haven't either?

Expert:  Jo C. replied 2 years ago.
Ok.
Did you receive a copy of that earlier?
Were the terms quoted to you even verbally?
Customer: replied 2 years ago.

I received the contract via post but nothing verbally. however I did sign a similar contract in 2010

Expert:  Jo C. replied 2 years ago.
Did it contain similar terms? I'm not sure what they think they are achieving then.
Customer: replied 2 years ago.

yes would have been pretty much the same contract maybe some variations.

Expert:  Jo C. replied 2 years ago.
OK.
Did that lock you in for 10 years?
Customer: replied 2 years ago.

Yes the first contract lock me in for ten years

Expert:  Jo C. replied 2 years ago.

Thanks

I'm not sure what they think they are achieving by doing this. If you saw the original contract then you are bound by that and making you sign a fresh contract won't change that. I suppose they might argue it is evidence though.

I'm not sure what you get out of agreeing to this. I am concerned that the purported lock in period is longer under the second contract potentially depending on the ostensible start date.

If it makes no changes at all then it doesn't really matter whether you sign or not but I would not recommend it in case it does.

Can I clarify anything for you?

Jo