Small Franchise Contract Help
timpo100
Posts: 10 Forumite
Hi,
I bought a franchise for £5995.00 from the Franchisor/Director of the company. I have now sold that franchise for £10,000.00.
In the original contract I signed, one point states:
Prior to the sale of the Franchisee’s Business the Franchisee shall pay or procure the payment to the Franchisor of such sum as represents 30% of the Franchisor’s then standard Initial Fee to reimburse the cost of training and other services provided to the proposed buyer;
I thought this means I pay 30% of the fee I paid (30% of £5995.00), but the Director is saying I owe them 30% of the fee I have sold the franchise for so 30% of £10k.
Can someone please guide me on which was is correct.
I bought a franchise for £5995.00 from the Franchisor/Director of the company. I have now sold that franchise for £10,000.00.
In the original contract I signed, one point states:
Prior to the sale of the Franchisee’s Business the Franchisee shall pay or procure the payment to the Franchisor of such sum as represents 30% of the Franchisor’s then standard Initial Fee to reimburse the cost of training and other services provided to the proposed buyer;
I thought this means I pay 30% of the fee I paid (30% of £5995.00), but the Director is saying I owe them 30% of the fee I have sold the franchise for so 30% of £10k.
Can someone please guide me on which was is correct.
0
Comments
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Surely you can see that "then standard" means price now
so the question is how much is the standard fee charged by the franchisor to buy a franchise from them "now"
I'll bet it won't be what you paid in the past when you bought one
whether it is £10k depends on whether that is the current price of a franchise purchased direct from the franchisor. It might be, it might not, only you can say.0 -
Surely you can see that "then standard" means price now
so the question is how much is the standard fee charged by the franchisor to buy a franchise from them "now"
I'll bet it won't be what you paid in the past when you bought one
whether it is £10k depends on whether that is the current price of a franchise purchased direct from the franchisor. It might be, it might not, only you can say.
I have agreed to sell it for £10k to a buyer who I found. Does that mean I have to pay 30% of the £10k I am selling it to to the person I originally bought the franchise off?0 -
I have agreed to sell it for £10k to a buyer who I found. Does that mean I have to pay 30% of the £10k I am selling it to to the person I originally bought the franchise off?
No it means you have to pay the Franchisor of such sum as represents 30% of the Franchisor’s then standard Initial Fee.0 -
if you really cannot understand such plain wording, then go see a solicitorI have agreed to sell it for £10k to a buyer who I found. Does that mean I have to pay 30% of the £10k I am selling it to to the person I originally bought the franchise off?
you certainly have to pay something to the franchisor.
As I said, whether that is 30% of 10k depends entirely on how much is the current initial standard fee charged by the franchisor, it might be 10k, it might not. Only you can find out since only know who the franchisor is and therefore can look up their current price list .0 -
Thank you. Apologies for sounding a bit dump.
I have just check and on 2 difference sources, ndw franchise opportunities are being advertised currently for the same price I originally paid, there if what you guys say is correct, it is 30% of what I paid originally as this is the price still being advertised.0 -
OK, so now you have some evidence as the basis of a contract dispute with your Franchisor over the fee payableThank you. Apologies for sounding a bit dump.
I have just check and on 2 difference sources, ndw franchise opportunities are being advertised currently for the same price I originally paid, there if what you guys say is correct, it is 30% of what I paid originally as this is the price still being advertised.0 -
After you explained what it meant, I looked to see the price it was being advertised at still, and it is still up for the same value I originally paid0
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