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QLD Franchise Network Directors in Dispute - What to Do?

Discussion in 'Commercial Law Forum' started by Roundabout, 1 September 2015.

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  1. Roundabout

    Roundabout Member

    1 September 2015
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    The small franchise network (<15 franchises) I signed up under has a holding company which holds the IP, and licences it directly to the 6 directors who are franchisors for their respective state/s. Every other state has basically shut up shop and walked away from the franchise network, releasing their state franchisees from their agreement and abandoning their businesses or operating independently.

    These 5 other directors are now in a major dispute with my director (the 6th) over serious matters relating to the holding company including misappropriation of funds and altering shareholdings/directorships of the parent company - amongst a whole load of other administrative and management issues.

    What I most would like to know is:

    1. How could I possibly be held accountable or to remain in a 'franchise' which basically no longer exists, except for myself and one director - a situation I certainly never signed up for and no longer wish to be part of.

    2. In the event that I have to remain in this sham of a business, am I entitled to a reduction in the ongoing royalties fees on the basis that the national network and overall structure of the business has changed and if so how would I go about this. Are there any precedents that could be referred?

    I have approached a solicitor for advice, but he is not giving me much hope in this situation. I sought previous advice from another solicitor on a different issue to attempt to terminate some time ago, who convinced me it would be better to stay than to fight, and now that solictor recently admitted to me that he "generally acts for the franchisor". I just can't seem to find someone who will take up our fight.
  2. rebeccag

    rebeccag Well-Known Member

    8 April 2014
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    G'day Roundabout,
    I'm aware of Franchising Code of Conduct | ACCC but franchise law is a specialised area and yes it would be in your best interests to get advice from a franchising specialist who is willing to consider your matter. See Get Connected with the Right Lawyer for You for a referral option. Remember that sometimes the legal advice you will receive is not necessarily what you want to hear, but at least you'll know your legal position and your best options.

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