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Posts tagged "settlement"

I Can Not Afford to Pay My California Franchise Fees Anymore

Running out of money is an unfortunate common situation among franchisees whether new or existing many years. The obvious solution for the franchisee is to pay the most important creditors first (payroll, vendors, rent, etc) and generally the franchisor takes a back seat when the franchisee is in financial strain. The key is work out a solution to the underlying business problem before the debt to the franchisor becomes insurmountable. Most franchisors will work with a struggling franchisee, even offering additional resources earmarked for such situations, like additional marketing assistance. Communication is the key. You need to stay in constant contact with the franchisor, and keep requesting specific assistance, and don't ignore the franchisor's collection calls. That will be seen as being non-cooperative. I have negotiated debt settlement agreements that reduce the franchisees debt over time based on other performances by the franchisee, showing that the franchisee is willing to implement the franchisors recommendations. It takes a creative attorney to fashion a creative solution to the issue at hand. If you are at the point where you believe all hope is lost, we can negotiate a mutual termination to the franchise agreement. In any case, do not clay in calling me to assist you in resolving your problems.

My Franchisor is Suing Me (or arbitrating) for Money I Know I Own But I Just Don't Have, What is My Option?

When a Franchisor sues or arbitrates merely for collections, there is a 100% chance they will be open to payment plans in Settlement that will work for you. As a franchisee, Ignoring the situation only makes you appear uncooperative. Paying a little even though it seems useless generally shows you are trying and Franchisors will shift focus to others who are paying nothing hence "uncooperative." Negotiating a settlement that you can not possibly fulfill is not recommended either. As a former in house franchise counsel, I can tell you that once you have a heart to heart conversation with one of the Franchise officers or a high profile rep explaining the specific operations issues, generally the Franchisor will be more attuned to offering specific operational recommendations, which you must be open to receiving and following through, in order for the Franchisor to hold off on legal action. Again it is all about the appearance of cooperation. The franchisor will figure out you don't have the money and will work with you to improve your business so you do have the money. The goal of you both is to stay in business and make money. If you close the Franchisor knows it will have no chance of getting paid. But a Franchisee who will not return Franchisors calls only hastens the day where they will be put out of business by the Franchisor. There are many ways to structure a payment plan that can work for both sides. We just need to be create. An experienced franchise attorney can assist in the process, if kept to a friendly level.

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