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JimLawyer
JimLawyer, Solicitor
Category: Law
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Experience:  Senior Associate Solicitor
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My son entered a verbal franchise agreement six years ago as

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My son entered a verbal franchise agreement six years ago as a driving instructor. He signed an agreement in 2018 and due to covid no longer can afford the franchise fee and is being threatened with debt collection for a january invoice for December despite not working in December and a months notice for April even though legally he couldn't teach until 14th April.
JA: Where is your son? It matters because laws vary by location.
Customer: He lives in Bath England
JA: What steps has your son taken so far?
Customer: He sent a text to say he had removed all decals from his vehicle as he hadn't had any contact from the franchisor for three months. He then got an email stating he needed to pay the January invoice and a months notice, to which he replied by email saying he had been given notice he would be let go if he was late paying in December 2019. And had not received the two hours training per year he was entitled to and had not received any support during the pandemic so he felt he had been given notice. He has now received a reply saying that he has to pay within 7 days or debt collection will be instructed
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: My son has Aspergers syndrome and originally met the franchisors wife and then had a telephone conversation where he was given the contact of two clients as a goodwill gesture and a week to agree to pay the monthly fee. It was three years later before he was asked to sign an agreement. It is not a franchise contract

Hello, this is Jim and welcome to JustAnswer. I will be the lawyer working with you today.
Sorry to hear of the issue. I will set out my written answer shortly.

You can argue the contract is frustrated and void due to Covid. A frustrated contract means that one or both parties couldn't comply with the contractual terms - many other contracts have suffered the same fate. You should use the attached letter to send tot he franchisor to try and persuade them that court action shouldn't be pursued.

Debt collectors are not bailiffs - they have no powers as such. They will simply try to collect the money their client thinks you owe. You can turn them away if you dispute the debt and they visit you - they can’t enter your home and take goods. They would report back to their client they were unsuccessful and it’s then up to their client whether to take matters further.

If they do sue, you will receive court documents (a response pack) which you must complete and return to the court. It is a tick box exercise for the most part and there is a short section to write a defence which is easy enough though please feel free to come back to this site if you need any more help. A claim will also take 9-12 months to be decided at court. If you lost then you would get 14 days to pay the judgment before the claimant can enforce the order, and 30 days to pay in full before it is registered with credit agencies. The claimant cannot recover legal costs if they win, in a claim under £10K (a small claim), all they can claim are the court fees and interest.

If the claim has no merit then you have an option (after your defence is filed) to apply to strike the claim out. The court will consider an application if the claim has no merit, or is misconceived. The application costs £255 but this is recoverable if your application succeeds. If you are on a low income, have low savings or in receipt of benefits then you can ask the court to waive the court fee. If you won the application, the claim is struck out.

The hearing (if the case gets that far) is likely to be held remotely, it's you, a district judge (who is a practising solicitor or barrister) and someone from the claimant company. The Judge decides and if you lost, you get 14 days to pay the sum. If paid in full within 30 days then nothing goes on your credit record. But certainly I think you would succeed in a defence, just to be clear.

If you lost and if you were unable to pay the full sum owed at that point you can also ask the court to pay by instalments (a simple form is sent in, form N245, and a fee of £50 unless you qualify for a fee exemption so if you are on a low income, have low savings or in receipt of benefits then you would qualify). If the CCJ was not paid in full though bear in mind the credit record would contain the CCJ details for up to 6 years. After that it comes off the credit registers.
I can assist you going forwards if it gets to the point they issue a claim. If you need a law firm to assist you to defend the claim, here is an example for you and they offer a fixed fee : https://stormcatcher.co.uk/practice-areas/dispute-resolution/small-claims-lawyer-service/

I hope this helps and answers the question - my goal is to ensure you are happy with the answer and have the information you need. If you have any follow up questions then please let me know. I will reply as soon as I can to help with any further queries.

Many thanks,
Jim

Please let me know if the answer helped or if you need me to cover anything else?. I am happy to clarify the answer or if you have any follow up questions. If so, I’d be grateful if you would let me know. I am free most days, including weekends, so feel free to ask me anything you are unsure of.

Best wishes,

Jim

Customer: replied 11 days ago.
Thank you. I can send copies of the emails if required

Thanks, ***** ***** want me to review them then that's fine.

Customer: replied 11 days ago.
I have had an opportunity to read the draft letter and I am not sure if we can adapt it as there are no premises and no deposit.this is the correspondence so far.

Thanks, ***** *****'t seem to open the attachments. I can review documents if the premium service offer is accepted. If you accept then please send the documents to***@******.***
Many thanks

JimLawyer and other Law Specialists are ready to help you
Customer: replied 10 days ago.
order ref 28079889-406 I have sent an email to***@******.*** with the attachments and this order reference. Please let me know it has arrived. Many thanks

Thanks, ***** ***** forward them to me shortly - there may be a delay given the company is in the US with the time difference. I will reply once I have them. Thanks

I have reviewed the documents now. You can use my template and simply take out any reference to premises and a deposit. My answer is the same - you point out that the contract applies to you but not him despite Covid - this is key as if the contract is one-sided it can be considered unfair (and therefore void). You can reply to him with the letter before action and then it's up to him if he caves in and pays - from reading his correspondence I am not sure he will, so the court may have to become involved to decide either way.

Customer: replied 10 days ago.
Would this be a suitable email to send?Dear ***** PARASKEVA,Termination of AgreementI refer to the above matter.It is important to note that I believed we had a franchise agreement and your invoices are for franchise fees and it is very clear that according to the British Franchise Association’s Code of Ethics a franchise agreement should have been for a fixed term. As the franchisor: you must provide the level of training and ongoing support mentioned in the franchise agreement.
It appears to me that as I am not an employee, nor did you have a franchise contract in place the agreement I signed is null and void for a variety of reasons.As you know, the current Coronavirus pandemic means that performance of various contracts (such as this one) is impossible. You should be aware that force majeure can suspend obligations for the duration of the external event – however there is no end in sight for the pandemic and I am unable to comply with the contractual terms.You will appreciate that this is not a temporary inability to comply. I am therefore entitled to rescind the contract with you. The contract is clearly frustrated as a result and this is beyond my control which you will hopefully appreciate.If litigation is contemplated please be advised that the courts view this very much as a last resort. These are extraordinary circumstances and my legal advisors state that you are likely to be penalised for involving the court in this matter.I therefore ask that no action is taken against me and I ask for a mutual agreement and confirmation that the contract is now terminated.I have had our correspondence reviewed by a solicitor who has noted that you believe the contract applies to me but not to you despite Covid - this is key as if the contract is one-sided it can be considered unfair (and therefore void).I am requesting the January invoice for Decembers franchise fee and the months’ notice to be waived. I will return the top box as agreed. Thank you for your understanding.Yours sincerely, *****

Hi, yes, that's good email - I would probably add "I ask that you please respond to this email within the next 7 days to confirm your agreement and I reserve the right to produce a copy of this email to the court should there be a necessity for litigation, which I sincerely ***** ***** not be required"/