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MShore Law
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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Can my franchisor collect future royalties if they terminate

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Can my franchisor collect future royalties if they terminate my a greenest if I fell behind on royalties payment to them. In california
Thank you for the post, I am happy to assist you by answering your questions. Are the future royalties payments that would be collected from you or from the sale of the goods/services offered via the franchisor?
Customer: replied 4 years ago.
Hello are you still their?
Yes, I am here Sam. Did you see my question?
Customer: replied 4 years ago.
They would be paid by me from the service
Customer: replied 4 years ago.
Relist: Other.
Didn't answer my questio
Thank you Sam, after terminating your franchise agreement your obligation to pay royalties for future services terminates, unless per the express terms of your franchise agreement the obligation to pay royalties is treated as a separate covenant per the contract.Please let me know if you have any follow up questions.
Customer: replied 4 years ago.
Relist: Incomplete answer.
Sam, I want you to have a complete answer, can you tell me what additional information you seek?
Customer: replied 4 years ago.
So I'm not liable for loss of future royalties if franchiseor terminated my franchise agreement due to me owing them money.
No, you generally would only be liable for the money that you owed up to the date of the contract termination. Bear in mind however that I do not have the benefit of reviewing the actual terms of your franchise agreement.
Customer: replied 4 years ago.
In California can the franchisor take position of my building and Buisness if they made me sign a collateral lease agreement. I own the building.
Was your building or the equity in it offered as collateral? If so, yes they can exercise rights to seize the collateral to satisfy the debt created by your breach of the franchise agreement.
Customer: replied 4 years ago.
No it wasn't as collateral
But I signed a collateral lease agreement when I first got involved with them I due plan to pay them but I want to continue to do Buisness
In my store as an independent Buisness
Not franchised. This is my mens to support my family
Thank you Sam, I can certainly appreciate that. If your building was not pledged as collateral you can still utilize the building for your commercial activity. You really should consider having your franchise agreement reviewed by a local attorney as the terms of your franchise agreement are absolutely critical in this situation, as CA will enforce the terms of that agreement. Please let me know if you have any follow up questions or need additional guidance.
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