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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118776
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Only... In reference to our previous conversations: I called

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for Law Educator Only...In reference to our previous conversations:I called yesterday saying I was willing to work out an agreement to avoid being sued and wanted to know what steps could be taken going forward. They said initially that in return for leaving all the equipment, food, beverages, and smallwares they would not pursue legal action against me for breach of contract and would accept any payment amount I give them towards the delinquent rent (even if I say $100 a month). I was initially hesitant because they get to walk in and operate and don't have to pay for anything.The Chairman of Noble Roman's called me and we talked and he sent over this email:"Brad:
As I just discussed with you on the phone, you are seriously in default of the rent which is going to end up placing you seriously in default of the Franchise Agreement. As I discussed on the phone, I want a friendly break and I am willing to forego all of the damages on the Franchise Agreement from here until the end, which I just told you I had not calculated that number but if I need to calculate it, it will be substantial. There is also neglected maintenance that has to be corrected and I am not going to charge you for that either if you cooperate and proceed as outlined in this e-mail.
My proposal was, and is, a quick and easy way to resolve this is for you to leave everything in the facility that is there, walk away and we will take over. The amount of the back rent we will allow you to pay back to Noble Roman's over time. The credit that was due you from Sofo, if and when received, we will apply that credit to the unpaid balance of the back rent you still owe.
You claim there are some pieces of equipment that are owned by your friend - that is between you and he and you work out with him whatever you need to work out but leave everything in the facility that is there now.
Please call my cell phone, which is the number I just gave you, as soon as you receive this e-mail.
Thanks.
Paul"I called back and stated that I couldn't speak for the ownership of someone else's property and would have to talk to Mark and asked that I get something in writing. He replied, "It is in writing, I emailed you." I replied that I wanted something more official and he sent me the letter I will attach when you respond.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
The problem with this is then that leaves you with the tax issue that they are wanting the equipment for the taxes. If you give the franchise all the equipment and essentially walk away from the store, you are then taking the equipment away from the department of revenue and will be left having to pay that bill. So you have to weigh out which offer is better for you financially, coming up with money to pay the tax debt and taking the franchisor deal to walk away rather than paying their default or not.
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Customer: replied 11 months ago.
As far as that is concerned I got word today that no taxing authority is claiming the equipment so that's not a concern. The file is attached.
Customer: replied 11 months ago.
Can you help me with a hold harmless agreement? Or if I draft one can you review?
Thank you for your reply.
I cannot write any hold harmless agreement for anyone on this site, that is forbidden by state laws. I could review what you write up. It is a good thing that the department of revenue is not going to make a claim to the equipment.
Customer: replied 11 months ago.
Definitely a good thing. I will work on one and send it over shortly. Just to confirm: If written correctly, the hold harmless says they can't come after me ever, for anything, past, present, or future?

Thank you for your reply.

If written correctly, it will protect you from the franchisor from coming back at you for any damages, yes.

Customer: replied 11 months ago.
Is there a certain state that I need to use when writing it? I was going to use a template from rocket lawyer but it asks the state. Which should I put? My state where I live and operate my business and it is registered, or Indiana, where the corporate address and headquarters are located?
You need one from your state.
Customer: replied 11 months ago.
Can you please review this document and make sure it protects me forward going forward from anything, past, present, or future?
Thank you for your reply.
Fix: "NOW, THEREFORE, in consideration of the above premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Franchisor hereby agrees as follows:"
Change "premises" to "promises."
Fix: "3. Franchisor affirmatively disclaims and waives all rights, if any, to hold the Franchisee, the Franchisee’s relatives, agencies, its officers, employees, personnel and agents, to any liability, including damages,..."
Change: "3. Franchisor affirmatively disclaims and waives all rights, if any, to hold the Franchisee, the Franchisee’s successors, heirs, agents officers, employees, personnel and assigns, to any liability, including damages,.."
Fix: "4. This Agreement shall be governed by the laws of the state of Indiana and will be bound by the existing statutory instruments in place in the state of Indiana."
Change: "4. This Agreement shall be governed by the laws of the State of Indiana existing at the date and time this agreement is dated. Jurisdiction of any claims under this agreement shall be in any court of lawful jurisdiction in the State of Indiana."
Other than those suggestions, the agreement is fine.
Customer: replied 11 months ago.
My company is registered and operated in NC, so should 4 say NC or Indiana?
Thank you for your reply.
You can try to change it to NC, but the franchisor may object and want it where they are located, in Indiana. Change 4 to NC and see what they say.
Customer: replied 11 months ago.
Can you please review this file.
Thank you for your reply.
They are saying they will release you from everything if you comply with their terms.
Customer: replied 11 months ago.
just to clarify, their terms are that I turn over operations of the restaurant and leave all the equipment in place? Do you think this is enough to fully protect me or should I attach the hold harmless agreement you reviewed earlier?
Customer: replied 11 months ago.
Are there any concerns that it says individually? I signed their contract with my personal name and did not link it to my Corporation. Would they ever be able to sue the corporation even if the corporation didn't sign the contract?
Thank you for your reply.
The way this written they are releasing you personally.
Customer: replied 11 months ago.
Could they sue the corporation if the corporation never signed any documents with them?
No, they cannot sue the corporation as there is no contractual link between them and the corporation.
Customer: replied 11 months ago.
I, on behalf of my corporation, signed two contracts to do pizza things that I still want to continue (they are outside of the restrictive covenances listed in the franchise agreement). I've included an updated and revised copy for your review. Can you please let me know if you think that I, my corporation, family members, employees, and other agents will be fully covered? In the letter the CEO sent me, he didn't mention anything about the state that it is governed by. Should I add that? Or leave it alone? If I sign at the bottom with "Brad Neumann, Individually" does that void any protections guaranteed above to my successors, heirs, agencies, etc.? It won't let me attach the file so I'll copy and paste.
Customer: replied 11 months ago.
October 31, 2016VIA: E-Mail: ***@******.***
Mr. Brad Neumann
121 Hunters Ridge Drive
Jacksonville, NC 28540Dear *****:This is to confirm the arrangements which we have agreed to on the telephone and also covered in the e-mail I sent your earlier today.For the purposes of this contract, “you” and “your” refers to Brad Neumann.First, we need to acknowledge that the rent is seriously in default, your Franchise Agreement will be in default and there are repairs and maintenance issues which have been neglected. Noble Roman's Inc. has agreed to forego all of those various damages for default in exchange for you turning over the operations to Noble Roman's, Inc. immediately and go our separate ways.Noble Roman’s Inc. is deducting the $500.00 that you had in the safe and transferred to Noble Roman’s Inc. from the balance due of $26,500.00, leaving a new balance due of $26,000.00. You have agreed to pay the past due rent and utility charges totaling $26,000.00 over time by paying $100.00 per month to Noble Roman's, Inc. You will be allowed to pay the remaining balance off sooner, if you so desire, but the maximum amount due per month is $100.00. Notwithstanding the above, if and when the credit due from SOFO Foods is received, it will be applied against the unpaid balance, therefore reducing the amount you ultimately have to pay to Noble Roman's, Inc. You agreed to leave in place all equipment, smallwares, food products, operating supplies, beverage supplies and all other items used in the operation of the business. You have taken your financial records, business computer and ancillary accessories and supplies, and any other purely personal belongings not related to the operation of the business. You do not warranty any of the equipment, products, smallwares, operating supplies, or other items left in the restaurant and you do not make any claim as to the condition of it. Everything left in the restaurant is left in the condition it is in as of the date this agreement is signed and you are not responsible for fixing or maintaining it. You will also pay your employees, on October 28, 2016 and on November 4,2016 all amounts you owe them as of those dates.It is your responsibility to settle with your friend, who claims to have ownership of a couple of pieces of equipment inside the facility which are going to be left there, and he will no longer have any claim to any of the equipment which is currently in the location.In exchange for the above agreement, and Brad Neumann's compliance therewith, Noble Roman's Inc. forever discharges and forever releases Brad Neumann, Brad Neumann’s relatives, successors, heirs, BADJS LLC, its officers, employees, personnel and agents, from any and all claims, causes of action, suits, proceedings, demands, expenses and liabilities of any kind or nature whether known or unknown, relating to any act, statement, omission or conduct occurring prior to the date of this Agreement, including any liability related to the Franchise Agreement, including any and all exhibits, schedules, and attachments, between Noble Roman's, Inc. and Brad Neumann. Notwithstanding anything, herein, should Brad Neumann violate any term of this agreement, in any material respect, only the term violated will be excluded and the rest of the agreement shall operate as if that clause was never part of the agreement.In exchange for the above agreement, and Noble Roman's, Inc.'s compliance therewith, Brad Neumann forever discharges and forever releases Noble Roman's, Inc. from any and all claims, causes of action, suits, proceedings, demands, expenses and liabilities of any kind or nature whether known or unknown, relating to any act, statement, omission or conduct occurring prior to the date of this Agreement, including any liability related to the Franchise Agreement, including any and all exhibits, schedules, and attachments, between Noble Roman's, Inc. and Brad Neumann. Notwithstanding anything, herein, should Noble Roman's, Inc. violate any term of this agreement, in any material respect, only the term violated will be excluded and the rest of the agreement shall operate as if that clause was never part of the agreement.Agreed to this October 31, 2016:Noble Roman's, Inc.By:_______________________________
Paul Mobley, Executive ChairmanBrad NeumannBy: ________________________________
Brad Neumann, Individually
You should not add in anything other than your "heirs, assigns or successors" next to your name where they release you from liability. You can sign it individually or personally is the better term
Customer: replied 11 months ago.
Does that cover my LLC, just in case they try to sue that for thinking I was doing Noble Roman's Pizza through the LLC?
Customer: replied 11 months ago.
Sorry to keep bugging on this I just really need the piece of mind.
They cannot sue your LLC, your LLC was not named anywhere in your franchise agreement and that is why it is not named here and not appropriate to name it here. There is no "privity of contract" meaning they have no basis to sue the LLC. So you are covered without mentioning the LLC.
Customer: replied 11 months ago.
When the corporate office knew my time was nearing an end they sent a field representative out to visit me. I found out recently that he went through my filing cabinets and pulled and looked at my tax forms, that of BADJS, LLC, who operates the franchise.
When getting threatened about not signing over the store as quickly as they would like, they mentioned that they had found a discrepancy in the amount of income reported to them for the sake of them taking their royalty and what I reported on my tax forms, thinking I was dodging paying royalty. But those taxes are in BADJS, LLC's name, so would it not be wise to include that on here?
Thank you for your reply.
There is no franchise agreement between BADJS and Noble Roman, so they cannot sue BADJS based on what I said above, "privity of contract" there is no privity between the two companies.
So there is no reason to include them on this release, it would not be legally proper.
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