Franchise Termination and county court claim

yojumitu

I bought a van based franchise for 14k last year. The franchise agreement is for 10 years. I closed the business after 6 months. The franchisor is demanding money they would have earned in Management service charge of 15% of gross monthly sales over the balance of the term. i.e- 9 and half years, which they claim amounts to tens of thousands. I only made £1700 gross sales in my first 6 months with this franchise?. they have gone to County Court over this and claiming this huge sum. The agreement only allows the Franchisor to terminate the agreement.? is the agreement enforceable?.What should I do.?

PLEASE ADVISE/HELP

Conor_3

Well you did break the terms of the contract so they can get you on that however there's the issue of whether the terms of the contract are fair or not. The County Court action is going to happen regardless and if you don't turn up, they win by default so you need to find yourself someone who specialises in contract law to see if there's anything in it you can use as a get out.

Saying that though, the Judge could deem the terms unfair anyway and throw it out.

yojumitu

The franchise is a Full BFA member. should i write to BFA?. if not, which organisation can help.?.

Is bankruptcy an option?. I was trading as a "Sole Trader."

Conor_3

If you were trading as a sole trader, you're liable for all the debts. Bankruptcy is a bit of a severe option TBH.

yojumitu

Can the franchisor sue me "expectation loss".?? there is no liquidated damages clause or performance base clause in the franchise agreement. He has taken me to county court to claim damages for balance of the agreement term. I closed down business after 6 months.

Show me the way out. I have appointed a barrister to defend , but my financial status is of limited means. Should i make the other party aware of my financial status?.


PLEASE ADVISE/HELP

MrsTinks

yojumitu to be honest this is not really a standard debt problem in as far as it's a legal matter relating to lost future earnings and contract laws. Your best bet is speaking to specialist solicitors for advice on this I'm afraid. There might be sites out there that have more information on this but as a mainly consumer debt board this is a bit of a different kettle of fish I'm afraid...
Wishing you the best of luck though.

yojumitu

Franchise Termination and county court claim
I bought a van based franchise for 14k last year. The franchise agreement is for 10 years. I closed the business after 6 months. The franchisor is demanding money they would have earned in Management service charge of 15% of gross monthly sales over the balance of the term. i.e- 9 and half years, which they claim amounts to tens of thousands. I only made £2000 gross sales in my first 6 months with this franchisei i.e £ 300 in MSC?. they have gone to County Court over this and claiming this huge sum. The agreement only allows the Franchisor to terminate the agreement.? is the agreement enforceable?what clauses make me liable to pay for damages for future earning loss?. PLEASE ADVISE

PLEASE ADVISE/HELP

yojumitu

My counsel/barrister has drafted a defence. He has suggested a part 36 offer to be made with the defence. There is no mention of penalty clauses or liquidated damages in the franchise agreement so he has not taken that into account. I am confused what to do.

Should I make part 36 offer.? And if so, then what is the reasonable offer.? He has given me option to counter claim but i am of limited financial means, I do not wish to go to trial, cos its gonna get messy and v v expensive for me.Whats my final straw in the hat?. How can i end this mess?

PLEASE ADVISE/HELP