What to do if you notice irregularities in your franchise relationship? It’s always a consideration. The forecasts provided by your franchisor prior to signing the franchise agreement cannot be met, and you will experience problems as a result. However, you also value a good relationship with your franchisor. This often also applies to any other trading relationships.
The advice is not to wait. Discuss problems, but also report problems in writing. If there is no solution, don’t wait. If you keep waiting to look for solutions to the problems that have arisen with your franchisor, or if you keep waiting to see whether a solution is actually found or offered, you run undesirable risks.
Not only does the risk exist that your problems will only get worse over time, but you also run the risk of forfeiting rights. If your problems have arisen due to the negligence of another person, then that other person should be informed and given the opportunity to improve, the legal term for this is a ‘default notice’. To demonstrate that this option is indeed offered, it is advisable to record this in writing. If a solution has not been realized or an agreement has not been fulfilled within a set reasonable period, it may be possible to enforce this in court. However, you cannot wait too long for this. There is then a risk that your claim will become time-barred, as a result of which any possibility of obtaining your right through the courts will be forfeited.
Of course you want to keep the relationships good, but that should also be possible without losing your rights, if only because you have always waited. In a good business relationship, written records can work very well. Every franchise relationship benefits from clarity, so that the views of the parties can be clearly assessed in the event of an unexpected assessment of a conflict by the court.
Ludwig & Van Dam franchise attorneys, franchise legal advice