When a franchisor is acquired by an investment banker or investment firm, several potential issues may arise for both the franchisor and the franchisees. Not all acquisitions lead to problems, but it's good to be aware of potential issues. Here are some concerns that may come up.
Do you need to get out of a franchise agreement? Understand your agreement. Consult experienced franchise counsel.
When you launched your business and set up a limited liability company, you probably signed an operating agreement. Your operating agreement is essentially an agreement among the owners about how the business will be operated.
If you are experiencing problems with your franchisor, beware of signing amendments to your contract or any other document purporting to resolve the problems. It is common for franchisors to give you a small concession to “help” you-but to extract a general release of claims and various factual “representations” in return.
