I hope someone could advise me on how to close a franchise. I am a franchisee and started our business as sole proprietorship last Dec 2008. The business is not profitable and until now we only recovered less than 20% of our investment considering that it was running two years already. Here are my questions:
1. What are the initial steps to follow to initiate closing a franchise?
2. What will be our obligations to our franchisor? As per franchising agreement,upon termination of agreement, the franchisee shall pay the franchisor a lump sum damages and not as a penalty, the amt of six percent of sales for the twelve months preceding the termination of the agreement. Will it mean that even we are not profiting from the business, we need to pay such amt? Is it common to all franchise?
3. What will be our obligations to our employees? At present we have one regular, one proby and one contractual employee?
4. Are there taxes to be paid when closing a business?
5. How soon can we stop the business upon filing for business closure?Since it is already November, do we need to renew business permits for the next year?
I hope somebody can help me on this matter. Thank you in advance