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Richard
Richard, Attorney
Category: Legal
Satisfied Customers: 55699
Experience:  Attorney with 29 years of experience.
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What legal protection is provided by South Carolina laws to

Customer Question

What legal protection is provided by South Carolina laws to prevent termination by a franchisor?
Submitted: 7 years ago.
Category: Legal
Expert:  Richard replied 7 years ago.

Good morning. Whether or not the franchisor has the legal right to terminate your franchise or not will be spelled out in your franchise agreement. If the franchisor is terminating your franchise agreement pursuant to some provision in the franchise agreement which allows such a termination, then the franchisor is within its rights to terminate you and you have no recourse. If the franchisor is breaching the franchise agreement by terminating you, then you can file a suit against the franchisor for breach of contract and seek an injunction preventing the termination.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 7 years ago.
I understand the terms of the franchise agreement but nearly all states provide some sort of protection from arbitrarty acts by the franchisor. I am specifically interested in South Carolina not anywhere else.
Expert:  Richard replied 7 years ago.
Hello again. As you probably know, there is no federal law governing franchise relationships, although in the 1990s new legislation on this topic was proposed in Congress several times. There are 19 states that regulate some aspect of the franchise relationship. These states include Arkansas, California, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, New Jersey, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, South Dakota, Virginia, Washington and Wisconsin. In these 19 states except for North Dakota, it is illegal for a franchisor to terminate a franchise agreement without good cause. "Good cause" usually includes things like:
  • the franchisee become insolvent or bankrupt;
  • the franchisee voluntarily abandons its operations;
  • the franchisee is convicted of a crime relating to the franchise operations; or
  • the franchisee fails to substantially comply with its material obligations under the franchise agreement.

South Carolina does not have a franchise relationship statute.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 7 years ago.
South Carolina does have a franchise law that pertains to equipment dealers, etc. Can this law be applied to service businesses as well?
Expert:  Richard replied 7 years ago.

This is a law that governs the initial franchise set-up...such as disclosure requirements. This does not apply to the relationship of franchisor and franchisee once the initial guidelines have been set up.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.