NSW Franchise Partner Kicked Me Out - What Can I Do?

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Perihan

Member
30 October 2014
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Hi.

In July I opened a company with a so called friend with 50% shares each. We bought a 40K franchise that comes with a car. It is a hired car services company. We agreed he becomes the sole director and I become a shareholder, as I have another business and did not want to be liable to something I can't control.

I lent the company 21K. A month ago, I got an email from him stating that he is kicking me out and that I have 2 options. Either I get 16k back and leave or only get 10% of the profit. He then texted me saying that he will sell the franchise and will pay me all the money back.

I have all these conversations in emails and in text msgs. He changed all passwords so that I won't see any data or get informed of anything. I know he sold the car and got paid for it for sure. Today, I texted him asking about the money I should have received a while ago and he replied saying that the business did not get sold. I know he sold the car and got paid for it and I know the business is running. I feel lost and I want to know my legal rights under commercial law as well as how to get my money back.
 

Tim W

Lawyer
LawTap Verified
28 April 2014
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Sydney
Hi. In July I opened a company with a so called friend with 50% shares each. We bought a 40K franchise that comes with a car. It is a hired car services company. We agreed he becomes the sole director and I become a shareholder as I have another business and did not want to be liable to something I can't control. I lent the company 21K. A month ago, I got an email from him stating that he is kicking me out and that I have 2 options. Either I get 16k back and leave or only get 10% of the profit. He then texted me saying that he will sell the franchise and will pay me all the money back. I have all these conversations in emails and in text msgs. He changes all passwords that I won't see any data or get informed of anything. I know he sold the car and got paid for it for sure. Today I text him asking about the money I should have received a while ago and he replied saying that the business did not get sold. I know he sold the car and got paid for it and I know the business is running. I feel lost and want to know my legal rights and how I can get my money back.
Let be sure I understand things (correct me where I am wrong)...
  1. Who is the franchisee? Is your company, or the other person personally?

  2. Is your entity a corporation, or a partnership?

  3. If it's a corporation, then are there are only two shareholders - that is, you and him?

  4. How many shares do you each own - one each? Or are there more than two shares?

  5. What do you mean by a "hired car services company"?
    Is it a Hire Car (ie a "limo")?
    Is the car owned or leased? And by whom - the company, or your co-shareholder personally?

  6. Is the $21,000 what you paid for your share at the start, or is it a separate loan?
 
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Reactions: DennisD

DennisD

Well-Known Member
11 July 2014
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If you answer Tim W's questions we'll all be in a better position to respond