I've been trying to resolve this on my own but I'm stuck.
franchise agreement hidden fees. I've been dealing with this for about 5 weeks now and the situation isn't improving.
The contract was signed 12 months ago. I am not sure I have the original signed copy. The total amount in dispute is approximately $23,000.
What are my legal options here? Is it worth pursuing?
Been there. Here's what I learned.
I ended up having everything documented, which cost about $3-6 but saved me a lot more in the long run.
This happened to me too. Have you tried filing a complaint with the relevant agency? In my case they investigated and it got resolved without needing a lawyer.
Just want to point out — the statute of limitations might be a factor here. In some states it's as short as 1-2 years. Don't sit on this too long.
I had a similar issue and ended up consulting with an attorney. It was worth the $200-300 for the initial consultation just to understand my rights.
NAL, but from what I've read, you should document everything. That said, definitely get a lawyer to look at the specifics.
NAL, but from what I've read, you should send a written demand. That said, definitely get a lawyer to look at the specifics.
I had a similar issue and ended up consulting with an attorney. It was worth the $200-300 for the initial consultation just to understand my rights.
I had a similar issue and ended up consulting with an attorney. It was worth the $200-300 for the initial consultation just to understand my rights.
I had a similar issue and ended up consulting with an attorney. It was worth the $200-300 for the initial consultation just to understand my rights.
I had a similar issue and ended up consulting with an attorney. It was worth the $200-300 for the initial consultation just to understand my rights.
This happened to me too. Have you tried filing a complaint with the relevant agency? In my case they investigated and it got resolved without needing a lawyer.
I practice in this area. Here's my take on the legal issues.
This is a common situation and the law is fairly clear. Under common law contract principles, unconscionable.
I'd recommend documenting everything in writing from this point forward. Keep copies of all communications.
NAL, but from what I've read, you should check your state's specific laws. That said, definitely get a lawyer to look at the specifics.
Bought a franchise 18 months ago. The FDD (Franchise Disclosure Document) listed a $30K franchise fee and 6% royalty. What it didn't clearly disclose: a mandatory 'technology fee' of $800/month, a 'brand fund contribution' of 2%, required minimum advertising spend of $2K/month (from an approved vendor list where the franchisor gets kickbacks), and a 'training renewal fee' of $5K/year. My actual costs are 40% higher than what I budgeted based on the FDD. Is this a FDD disclosure violation?
@FranchiseeJoined2024 — Potentially, yes. The FTC Franchise Rule (16 CFR Part 436) requires franchisors to disclose all fees in Item 5 (initial fees) and Item 6 (other fees) of the FDD. If any of the fees you describe were not clearly disclosed in Items 5 or 6, that's a violation. Specifically: (1) Technology fees and brand fund contributions should be in Item 6. (2) Required minimum advertising spends should be in Item 6 and/or Item 7. (3) Vendor kickbacks are a significant issue — if the franchisor receives rebates from required vendors, this must be disclosed in Item 8. Your remedies may include: rescission (unwinding the franchise agreement), damages, and in some states, attorney's fees. The statute of limitations varies by state but is typically 3-6 years from discovery. Consult a franchise attorney immediately — these cases often involve pattern behavior affecting multiple franchisees, which strengthens the claim.