Legal Advice Needed On Getting Out Of A Franchise?

January 16, 2010 by Da Boss
Filed under: General 

I own a franchise that I’m trying to get out of. I leased a store front where I operate my smoothie franchise. The franchisor has nothing to do with the lease as it’s all in my name. I want to get out of the franchise and do some similar business in the location. The contract I signed with the franchisor has the non-competition clause below. My understanding is that as long as I’m not in the business of selling franchise rights, I will not be in breach of this agreement. Can someone with a legal background tell me if I’m right? Any info will be appreciated. Thank you very much!
The term “competitive business” as used in this agreement means any business offering, or granting franchises to others to offer fruit beverages or any other products or services offered by Franchisor.

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Comments

5 Comments on Legal Advice Needed On Getting Out Of A Franchise?

  1. figaro19 on Sat, 16th Jan 2010 3:46 pm

    2. Fake your own death.. that should do the trick.

  2. Loss Leader on Sat, 16th Jan 2010 7:42 pm

    3. A competing business would be any business that sells fruit beverages or anything similar to anything sold by the franchisor. You can run any other type of business but you can’t sell fruit juice or products similar to the franchisor’s products. You also can’t sell franchise rights to any such business, but offering the products yourself in your own store is still a competing business.

  3. caffeyw on Sat, 16th Jan 2010 11:21 pm

    4. As long as you meet the following you can open a new business
    1)The new business has nothing to do with fruit beverages or any other products/services currently sold
    2)You can’t offer a franchise license to someone else to operate a fruit beverage store.
    Basiclly as long as you do not want to go into the fruit beverage business you are good. The franchise clause is to prevent you from getting around the operating clause by “selling” a license to operatre a fruit beverage business to another person.

  4. pgufs on Sun, 17th Jan 2010 6:19 am

    5. So you say you want to do the following:
    1 — Terminate the current contract with the franchisor.
    2 — Open another business in the same location with a new franchisor.
    If so, you can do that.

  5. mdjohnso on Sun, 17th Jan 2010 12:16 pm

    6. Errrr probably not…. your competiotion clause is there so you can’t buy all of the equipment learn all the secrets and the turn around and open your own store (at least not for a few years). Have a lawyer read the specifics and give advice after reading the document…..

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