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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 110470
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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I am in a franchise that I would like to terminate. I have

Customer Question

I am in a franchise that I would like to terminate. I have some questions about what the consequences will be for me. I need a lawyer to read over a section of my franchise agreement and answer some questions for me.
Submitted: 3 years ago.
Category: Legal
Expert:  Law Educator, Esq. replied 3 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

Does your contract have a termination provision?

Has the franchise breached the franchise agreement? If so, have you given them notice in writing of the breach and have they refused to cure it?
Customer: replied 3 years ago.

I think it does have a termination provision. I think they might have breached the franchise agreement because I saw a charge that was not mentioned anywhere in the agreement unless I overlooked it..


This is my main concern. I have owned my own independent tax office since June of 2009.


I opened a tax/insurance franchise 3 months ago and I am not sure it is going to work out for us. If we decide to terminate the contract because of the no compete clauses are we going to be able to still run our current tax office. I am an insurance agent. Am I not going to be able to sell insurance anymore?


Another issue is that our landlord signed a contract with us saying that we could do taxes in our office and HR block is in the same shopping center and they signed something with the landlord saying that he wouldn't have another person there doing taxes. My lease will be up in 3 years before my franchise agreement is over and we will most likely be forced to move and it would cost ALOT of money to relocate..


Could you look over the section of the agreement that talks about the no compete and termination part of it..I want to know what will happen if I have to get out.

Expert:  Law Educator, Esq. replied 3 years ago.
Thank you for your response.

I am afraid that if you do have a non-compete clause in the contract and you terminate the agreement, you can indeed be held to the terms of that non-compete.

Non-compete agreements are upheld as legal by the courts when the court finds that the extent of the non-compete is reasonable in the nature of the activity that it seeks to protect, when it is reasonable in geographic scope and reasonable in length of time (2 years is generally the maximum). If the court finds the agreement reasonable on all three then the non-compete will be enforced.

If they have indeed breached the contract, then you would have to seek to terminate the contract based on that breach, which would void the whole agreement including the non-compete, but in most cases this will require you to sue in court over the breach of contract to have the court (or arbitration if your agreement has an arbitration clause) void the contract based on their breach.

If you can post the agreement in here or on a website like, I can review those parts of the agreement you have questions over.

On your second issue, If your landlord signed a lease stating you could do taxes and he signed one with HR Block saying nobody could do taxes in the property, then that is an issue between your landlord and HR Block, since they cannot force you to stop doing taxes as you have no clause in your lease saying you cannot do taxes.

I truly aim to please you as a customer, but please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. Please consider that I am answering the question or question that is posed in your posting based upon my reading of your post and sometimes misunderstandings can occur. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered.

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Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.

Customer: replied 3 years ago.



That would be great! See our independent tax office is located in a different city from where we opened our franchise. And since I have already owned my tax office before the franchise would that be took in consideration? Look around page 40. That will take you straight to the part where it says if I do compete I have to give 50% of my earnings and they have the right to check my books. Not only is this franchise going down, and we are going to lose all of the money invested, now we are going to lose our earnings for 2 years at our other office?

Expert:  Law Educator, Esq. replied 3 years ago.
Thank you for your response.

The fact you have no prohibition in your lease regarding performing tax work and you do perform tax work means that the landlord still cannot stop you and the lease violation regarding that restrictive clause is between the landlord and the HR Block tenant because that is who he has that contract with and many times the landlord will buy out a tenant, reduce rent or allow them out of the lease in these situations to avoid being sued by the other tenant for violation of the restrictive clause.

If you terminate this contract, unless you pursue them for breach of contract or get a written waiver, I am afraid you could indeed be held liable for 50% of the profits if you open another business engaged in the same trade within the same protected area. Thus, it would not prevent you from operating in an area outside of the protected area specified in the agreement, so that is another avenue to explore, especially if HR Block is complaining your landlord is breaching their lease by allowing another tax service on the property, because it would allow you to negotiate out of your lease and open outside of the protected area if possible.

Alternatively, if the franchisor is in breach, you would have to take them to court to have the contract voided to avoid this non-compete agreement
Customer: replied 3 years ago.

Ok because our independent tax office is located outside of the protected area. So it is safe to say that we will not have to give them half of our profits this coming tax season?


I also saw something saying that even if we take them to court for breach of contract that section 17 of the no compete will still be enforceable?


I know that because of the landlord situation that we are going to be kicked out once our lease expires in 3 years anyhow. Maybe I should talk to the landlord about buying us out and then he can terminate the contract with them.


Thank you so much for all your help.

Expert:  Law Educator, Esq. replied 3 years ago.
Yes, that is correct, the agreement specifies in 17.2.1, that you are not upon termination of the agreement to operate, work in etc a same business that is within the protected area.

If you take action based on breach of the franchise agreement the non-compete might or might not be enforceable still, it depends on the court determining the nature of the breach of the contract. However, the contract does specify within the protected area and if it did not have a limited geographic scope then this would be also a ground to argue the agreement is not reasonable on that one prong of the 3 prong unreasonable test for non-compete agreements.

As far as the landlord, you need to approach the HR Block owner and tell them you have no clause in your lease prohibiting you from doing tax work in the location and if they want to push the issue with the landlord it is between them and the landlord. Then after that, you would approach the landlord to negotiate a buyout or termination of your lease without penalty.
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Customer: replied 3 years ago.
Thank You!!! Smiletitle="Smile"/>
Expert:  Law Educator, Esq. replied 3 years ago.
Thank you