Franchisors Need to CYA In Case of Franchisee Litigation
Legal Article GuideBy: Lance Winslow
Well we all know we live in a very litigious society, almost to the point of absurdity with law schools turning out professional parasites by the tens of thousands each year. In franchising a franchisor has to worry that if a franchisee fails due to their own issues that they will name them in the lawsuit, as they most always do. Therefore a franchisor must keep themselves from unnecessary and unwarranted liability.
It is for this reason that in our franchising company we inserted this clause to shield us from that potential eventuality and although it was not full proof it does help. Of course you will have to ask your own attorney [thief] what they think or how you might word such a clause to help your company. Below is the clause I came up with for my company;
7.17 Success of Business
7.17.1 Franchise Risk, Franchisee Ability
Franchisee acknowledges that the success of the business venture contemplated by this Agreement depends primarily upon the business acumen and ability as an independent business owner. Franchisee acknowledges that neither Franchisor nor any other person has guaranteed or warranted that Franchisee will succeed in the operation of the Franchised Business or has provided or made any sales or income projections of any kind to Franchisee. Franchisee also acknowledges that this business involves hard work and sometimes long hours, similar to most small businesses, which are owner operated, and that Franchisor never promised this business was going to be easy for
Franchisee, Franchisee’s partners, members, officers or directors. Franchisee further acknowledges that they are in good health and able to devote their full time and best efforts in the day-to-day operation of the Franchised Business or that Franchisee has the business management skills necessary to successfully hire a general manager to run the day-to-day operation of the Franchised Business.
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Perhaps you might come up with another clause or your attorney scum of the Earth [opinion only exercising right to free speech] might have some ideas for you. You must address such issues to keep your company strong and healthy from the virus of litigation in our society. Consider this in 2006.
Lance Winslow - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs/
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