• Memorandum of Understanding (MOU) with franchise company

Dear Sir/Madam,

I am Kehulkumar Kavaiya. few days ago I have decided to Buy one company's franchise.  Than the company has send me The MOU to read. In the MOU it has clearly mentioned that once you paid franchise fee it will not be refundable but only transferable. I have filled the MOU and I have sent that to the company via email. In the email I have written that "can you please check the MOU and let me know if you want anything to change or fill".... However I have not mentioned anything saying that I have accept or I am agree with your MOU. 

I was very serious about doing business. Therefore I have credited half of the franchise fee to the company's account with out signing any documents or I have not agreed any thing in email either. 

Now I have decided to not buy a franchise and get refund the amount I have paid to the company due to family problem. Now the company is saying to me that the amount I have paid can not be refunded. 

Can you please guide me What can I do in this situation to get my money back from the company.

Waiting for your reply     
You can also reply me via email to kehulkavaiya@
Asked 2 years ago in Business Law from Ahmedabad, Gujarat
1. The sending of mou for their approval is amounting to acceptance of mou unless you have caused material changes in the terms.
2. If that's so then you become bound by its terms and accordingly you become disentitled to any refund.
3. You better try to resolve amicably and maybe settle for lesser amount.
4. The civil suit for recovery of money maybe opted for but considering the time and money involved it may not be feasible.
Devajyoti Barman
Advocate, Kolkata
13135 Answers
174 Consultations

5.0 on 5.0

1) you made the mistake about  making 50 per cent payment without signing MOU 

2) it is necessary to peruse correspondence exchanged by you with company 

3) it appears that you have not accepted he MOU as you did not return same duly signed to the company 

4) issue legal notice to company to refund your advance payment made 

5? if company refuses file suit for recovery of money paid by you  
Ajay Sethi
Advocate, Mumbai
46704 Answers
2763 Consultations

5.0 on 5.0

Since you had not finalised the deal and not affixed your signature on the MOU, send a legal notice to the Company to refund your money forthwith within the target set date and also state in the notice that if there is no positive response for the legal notice, legal action will be initiated against the Company for unfair trade practices.
Shashidhar S. Sastry
Advocate, Bangalore
1649 Answers
109 Consultations

5.0 on 5.0

Though you have not signed the MOU and acceptance letter, the 50% amount you have sent is an indicator to show that you have accepted the terms of Franchise purchase.
However you can issue a legal notice to the company to refund the amount sent by you, if the company refuses then you may file a money recovery suit through a civil court.
T Kalaiselvan
Advocate, Vellore
36867 Answers
403 Consultations

5.0 on 5.0

1. The filling of blank spaces in the MOU is tantamount to acceptance of MOU in its entirety.  You ought to have obtained legal opinion earlier.

2. The company is right in refusing the refund. 
Ashish Davessar
Advocate, Jaipur
23120 Answers
640 Consultations

5.0 on 5.0

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