Hi! I'm Dane Carlson, and welcome to the Business Opportunities Weblog. I've been publishing this website, by myself, and sometimes with the help of others for over twelve years now. You'll notice two things about this site right away:
Joel Libivia of Small Biz Trends interviewed Rush Nigut, an Iowa Franchise Attorney, about what a franchisees options are when a franchisor goes under:
Small Business Trends: What is the first thing franchisees who finds themselves in this situation should do?
Rush Nigut: The first thing a franchisee should do if the franchisor is in trouble is to review the franchise agreement to make sure the franchisor is meeting its obligations. If not, a franchisee will want explore whether there is a breach of contract and whether the franchisee can possibly terminate the agreement if that makes sense.
Small Business Trends: Franchisees spend a lot of time and money to find and keep customers. Can they keep their customers if the franchisor goes under?
Rush Nigut: Obviously, franchisees will want to keep their customers or clients; they’ve worked hard to get them. But they need to make sure that they avoid any non-compete enforcement. Many franchisees are under the mistaken belief that the customers belong to them. Instead, the termination provisions and non-compete provision written into franchise agreements tend to favor the franchisor.