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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37822
Experience:  Retired (mostly)
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Im an franchise owner, and Ive paying royalty fees monthly.

Resolved Question:

I'm an franchise owner, and I've paying royalty fees monthly. My question is, am I obligate to pay royalty fees if with the following apply.
I haven't sign any contract between franchisor and franchisee. And now I just found out the LLC they created hasn't form a franchisor. Would I continue to pay the royalty fees? if not, would I be able to claim the money that been paid for past several month?
Submitted: 6 years ago.
Category: Business Law
Expert:  socrateaser replied 6 years ago.

If you don't have a written contract, then your payments are not necessarily for royalties, because you don't necessarily have an agreement to pay royalties. You don't appear to have much of anything.


If you're asking whether you can claim your payments on your tax return as expenses, then as long as they were made for the "production of income," then they are deductable.


Hope this helps.


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Customer: replied 6 years ago.
"You don't appear to have much of anything" Is that meant, I don't have to pay for any royalty fees in the future right? Thanks.
Expert:  socrateaser replied 6 years ago.
That's right. Who is to say that what you paid for was a royalty, or that there was any fixed term to the contract, or anything else?
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