franchisee litigation compensation

Everything may be working seamlessly when you first open your franchise business. But you may soon realize that your franchisor is not upholding certain responsibilities. And when you voice your concerns, they may be negligent in addressing them. This is when franchisee litigation may deem pivotal. Continue reading to learn what compensation you may seek in a franchisee litigation against your franchisor and how one of the experienced franchisee litigation attorneys at FortmanSpann, LLC can work to build a strong legal strategy on your behalf.

What grounds can I claim for suing my franchisor?

There are many ways in which a franchisor may take advantage of you. And the only way in which you can rectify their behavior is by getting the court involved. Without further ado, below are examples of grounds you may claim when suing your franchisor:

  • Your franchisor violated an item in your franchise disclosure document (FDD).
  • Your franchisor violated federal antitrust laws by refusing to deal.
  • Your franchisor violated federal antitrust laws by practicing tying arrangements and price fixing.
  • Your franchisor violated your exclusive territory rights by practicing territory encroachment.
  • Your franchisor conducted unfair franchise practices by imposing unreasonable sourcing restrictions or system standards.
  • Your franchisor practiced franchise discrimination by displaying disparate treatment with purchasing restrictions and advertising restrictions.
  • Your franchisor participated in fraud by misleading you before or after your purchase.
  • Your franchisor attempted to impose extra obligations to which you have not contractually agreed.
  • Your franchisor wrongfully terminated your franchise business.

What compensation can I claim in a franchisee litigation against my franchisor?

Essentially, you may seek financial compensation for the economic damages you incurred as a direct result of your franchisor’s failure to perform, along with any other incidental or consequential loss caused by their negligence. Economic damages refer to monetary losses, and examples are as follows:

  • Restitution damages, which are the benefits you would have obtained were it not for your franchisor’s negligence.
  • Expectation damages, which are the actual and future profits you would have obtained were it not for your franchisor’s negligence.
  • Punitive damages, which are to stop the franchisor from engaging in this negligent conduct in the future.
  • Consequential damages.
  • Statutory damages.
  • Tort damages.

You must deeply consider whether you want to take your case to court. There may be a clause in your FDD that states that any unsuccessful legal action against your franchisor may require you to pay for their attorney fees, court fees, etc. This is why it may be in your best interest to first attempt to reach a settlement agreement with your franchisor via mediation.

But the bottom line is that, if you believe you are being taken advantage of by your franchisor, then you need one of the skilled franchise law attorneys in your corner. Call or send a message to FortmanSpann, LLC today. We look forward to hearing from you.