This ad will close in
Question added to topic Legal Basics For StartupsOctober 16, 2009

Is the franchisee the only party of interest in a breach of contract lawsuit?

The case was brought by a franchisee customer. Do we include the franchisor as a defendant in the complaint?
The short and obvious answer to "who can I sue?" is "It depends."

What's the real nature of your claim? Generally, if you enter into a contract with a corporation or LLC, your sole recourse is against that company. So if the franchise/company provides auto body parts and you were supposed to receive a muffler (and didn't), usually you can only look to the franchisee for your claim.

However, there could be an unusual situation where although you were a customer of the franchisee, the underlying franchise model is the real problem--not just the service delivery at the franchisee end.

Take, for example, a weight management program. If it made you gravely ill, you might argue that the issue is not just with the franchisee that provided you with the foods and supplements, but with the franchisor who developed them.

But in that situation, you're starting to move past a basic breach of contract situation and into a tort claim.

To get a clear assessment of your potential damages and who you can fairly bring into a lawsuit, you'd be wise to consult with a litigation attorney in your area--particularly one who has experience with franchises and going through the offering circulars.

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.

0 Comments. Post Yours.

About ASK ENTREPRENEUR

Ask Entrepreneur is a question-and-answer forum for and by the Entrepreneur.com community. Send in your burning business question, or comment on someone else's now. Have a Question? Ask Now

Topics (over 1000+ answers)

Don’t see a topic? Suggest One

Ask Entrepreneur Q&A Hangouts

Google + Hangout With Shark Tank
Google + Hangout With Jason Falls
Google + Hangout With Angela Jia Kim
Google + Hangout With Grant Cardone