How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Law Educator, Esq. Your Own Question

Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 89530
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
10285032
Type Your Legal Question Here...
Law Educator, Esq. is online now
A new question is answered every 9 seconds

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: 1 year ago.
Category: Legal
Expert:  Law Educator, Esq. replied 1 year 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 1 year 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 1 year 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 http://www.wikisend.com, 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.

Kindly remember the ONLY WAY experts receive any credit at all for spending time with customers is if you click on OK, GOOD or EXCELLENT SERVICE even though you have made a deposit or are a subscription customer. YOU MUST COMPLETE THE RATING FOR THE EXPERT TO RECEIVE ANY CREDIT, if not the site keeps your money on deposit.

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 1 year ago.

Fiesta_-_Franchise_Agreement_(Store__TN005).pdf

 

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 1 year 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 1 year 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 1 year 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.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 89530
Experience: JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
Law Educator, Esq. and 11 other Legal Specialists are ready to help you
Customer: replied 1 year ago.
Thank You!!! Smiletitle="Smile"/>
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Not only did he answer my Michigan divorce question but was also able to help me out with it, too. I have since won my legal case on this matter and thank you so much for it. Lee Michigan
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    19941
    Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    8189
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/jespoag/2008-12-17_222355_jessepic.jpg JPEsq's Avatar

    JPEsq

    Attorney

    Satisfied Customers:

    2132
    Experience as general attorney, in house counsel, SSDI, Family Law attorney, and law professor
  • http://ww2.justanswer.com/uploads/gsenmartin/2008-04-22_214950_me1.jpg Guillermo J. Senmartin, Esq.'s Avatar

    Guillermo J. Senmartin, Esq.

    Attorney

    Satisfied Customers:

    110
    7+ years of experience handling various legal matters.
  • http://ww2.justanswer.com/uploads/PA/PaulmoJD/2013-10-10_195858_JAImage.64x64.jpg Law Educator, Esq.'s Avatar

    Law Educator, Esq.

    Attorney

    Satisfied Customers:

    31621
    JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    15975
    Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.