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My boyfriend opened a franchise (coupons by mail) and sells…

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My boyfriend opened a...

My boyfriend opened a franchise (coupons by mail) and sells advertising. The contract with the franchise company was for 10 years. He created an LLC and he does own the franchise (exchanged monies to purchase). He agreed to run his franchise through their corporation and he pays royalty fees, printing fees and mailing fees, which he has never defaulted on. The problem is he is losing money, a LOT of money now, and has told them he is going to walk a way. He knows he is responsible to pay the departing fee of about $26,000 dollars, but now they want him to fill out a form naming all his assets ( he is 65, rents, has a little money in the bank, and his pension from another job). He thinks they will take him to court and sue him for his assets if he doesn't hold on for the ten years (it has been five), but he is losing over 10,000 monthly with their fees. Can they sue the LLC and him personally and take whatever savings he still has? Can he file bankruptcy?

Lawyer's Assistant: Can you tell me what state the LLC is registered in?

New Jersey

Lawyer's Assistant: Has anything been officially filed? If so, what?

Corporate is in CA

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

He has less than 25,000.00 and it was for us to move out of state (FL) and purchase a townhouse to retire. I am 67. He has an old car valued at about $30,000 dollars. That is it! All he owns.

Submitted: 10 months ago.Category: Legal
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Answered in 1 minute by:
9/25/2017
Lawyer: Loren, Attorney replied 10 months ago
Loren
Loren, Attorney
Category: Legal
Satisfied Customers: 39,260
Experience: 30 years experience representing clients.
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Thank you for using JA. I am Loren, a licensed attorney for over 30 yrs., and I am here to help.

I am a certified expert on JustAnswer since 2009, with nearly 100% in 5 star ratings. So, we should be able to work through your problem.

I appreciate your patience as I review your question. I will post my response shortly.

This is general information and no attorney client relationship is established.

The site may ask you if you wish to speak by phone for an extra charge. Many find the phone call to be the easiest and fastest way to get the information they need without posting on a public forum. I am also happy to continue online.

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Lawyer: Loren, Attorney replied 10 months ago

Did he sign the contract or guaranty it personally, or was the LLC the only entity which signed the franchise contract?

Does the contract state the departing fee is "liquidated damages"?

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Customer reply replied 10 months ago
I inow he purchased the franchise then created an LLC. I don’t inow what they call the leaving fee. They will take back the franchise and re-sell to someone else.
Customer reply replied 10 months ago
It is called an early termination fee
Lawyer: Loren, Attorney replied 10 months ago

Thank you for the additional information.

If he signed the franchise agreement personally and breaches then they can sue him for the damages. If there is a liquidated damages provision then that would be the limit of his liability.

Absent a judgment or court order, he has no legal obligation to reveal all his assets to the franchiser.

So, he can decline to provide that information. They are not entitled to anything from him without a judgment.

If he is sued then he will want to retain an attorney to defend himself. If you need assistance finding local counsel try Martindale Hubble (site rules prohibit us from referring specific attorneys). Many attorneys themselves use this site to locate attorneys outside their jurisdiction or expertise:

http://www.martindale.com/Find-Lawyers-and-Law-Firms.aspx

It is a huge worldwide database searchable by location and specialty. The attorneys are peer rated. So, they represent the top of the profession.

Again, he has no legal obligation to provide the requested asset information until and if they get a judgment against him.

Please remember to leave a favorable rating (click 5 stars in the rating section on this page). It is the only way that I am credited by JustAnswer for answering your question.

There is no additional charge to you for rating me favorably.

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Lawyer: Loren, Attorney replied 10 months ago

Are you still online with me?

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Lawyer: Loren, Attorney replied 10 months ago

Did you have further questions? Please let me know if I have answered your question satisfactorily.

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