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closing a franchise

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1 closing a franchise on Wed Jun 08, 2011 3:19 pm


Arresto Menor
Hi Atty, I am a franchisee and intend to terminate our franchise agreement, as initial action, I sent a letter to our franchisor of the intention and also to our lessor informing that I am not renewing a contract. Since our lease contract will end soon, to be able to get our security deposit from the lessor, what the franchisor did was they offered to operate the outlet under our name and using our equipments until the lease expires and asked us to give them a portion of the security deposit as a mgt fee and condition that all income will go to them as they will pay all the expenses. Is this legal? What should be our rights as franchisee? They said that we will talk about the formal turn over after our lease contract ends, what document can we ask / prepare to ensure that we have no obligations to them at the time the business closes? Please advise.

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2 Re: closing a franchise on Thu Jun 16, 2011 5:57 pm


it is up to the parties how to agree. i do not see anything wrong with the proposed arrangement.

i recommend you list down the stipulations into a contract so that there will be no misunderstandings.

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