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I have been a franchisee in Washington State with a peer board/business

coaching franchise for over three...
I have been a franchisee in Washington State with a peer board/business coaching franchise for over three years. The agreement that governs our relationship is very restrictive in terms of my ability to either coach or facilitate peer boards for two years after I terminate my franchise with them.
I have recently signed a revised agreement that changes the revenue split between me and the franchisor and gets me out of the seven years remaining on my the original contract. This will help my cash flow; however, I no longer have a protected territory, and I have given up my right to market.
I do not want to use their materials, trademarks, methods, secrets, etc. In fact the reason that I want to end my relationship with them is that I see no value in being associated with them. Nothing that they have is of any value to me.
What I do want to do is to build a peer board coaching business using my own name. I also want the members that I have now to be able to join one of my new boards.
Neither peer boards nor business coaching are unique to this franchisor. In fact I was a member of a peer board in 1990, back before this franchise even started.
I am 67 years old and I cannot survive economically going forward if I can't coach and facilitate boards. I couldn’t survive under the financial arrangement that I was originally under, my new arrangement is good only in that it stops the hemorrhaging, but there is no possibility of growth.
Is there a way that I can I start my own business in this profession without fear of what they will be able to do to me?
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Answered in 6 hours by:
2/6/2011
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 121,091
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Unfortunately, if you signed a non-compete/non-solicitation agreement, if you go off and open your own board, they will sue you for damages and also an injunction to stop you from operating. These non-compete violation cases can get very expensive and I have had minor violations cost the violator $5000 plus attorney's fees. You need to negotiate a release from the non-compete/non-solicitation agreement with the company and if you do not and they find you have started up a new board it will be a costly legal battle for you and one you likely will not win because these agreements are enforceable in WA and if you are in the same business (even if you are not using their materials or marks) and taking their customers.

You may be able to negotiate a buy out of the agreement or some other deal with them to even reduce the length of the non-compete, but unless you do, I am afraid you are stuck.


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Law Educator, Esq.
Category: Business Law
Satisfied Customers: 121,091
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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