I hope this message finds you well. I am reaching out to seek your professional guidance and advice regarding a significant issue I've encountered with a franchisee agreement. In brief, I entered into a franchisee agreement with a Goa-based company in Ahmedabad to operate a multi-brand store specializing in two-wheeler electric vehicles. However, several complications have arisen throughout the course of this arrangement, and I find myself in a precarious situation. Firstly, the company, which does not manufacture vehicles directly but rather acts as a mediator with various brands, failed to adequately inform me of the legal requirements for selling vehicles. While I was under the impression that having a GST number was sufficient, it became apparent that RTO TC (Registration Transfer Certificate) was also necessary, a crucial detail that was omitted during our initial dealings. Moreover, the company's promises of ongoing support and training for staff were not fulfilled as expected. Training sessions were inadequate, and the quality of the supplied vehicle stock fell short of what was initially promised. Additionally, complications arose when attempting to obtain the necessary TC from the Gujarat RTO due to the nature of being a multi-brand store, ultimately resulting in rejection despite my best efforts and substantial financial investment. Subsequently, a customer who purchased a vehicle from my store faced significant delays in registration, leading to dissatisfaction and even physical altercations. Despite my repeated attempts to seek assistance from the company, their responses have been lacking, leaving me to navigate these complex issues alone. Furthermore, the company proposed an alternative income stream through a rental program with a third-party platform, which ultimately proved unsuccessful, leaving me burdened with additional financial strain and obligations. In light of these circumstances, I find myself in considerable debt and facing immense personal and professional stress. The company's refusal to assist in resolving these issues has only exacerbated the situation, leaving me at a loss for how to proceed. Additionally, I want to emphasize my intention to recover all losses incurred as a result of the company's actions. Starting this business involved taking out loans, and now I find myself unable to meet the financial obligations, including loan repayments. The situation has escalated to the point where I've had to seek additional loans from various sources to cover daily expenses. It's imperative that I explore all avenues to recover these losses and alleviate the financial strain imposed upon me. Given the complexity of the situation, I would greatly appreciate your expert advice on the best course of action moving forward. Specifically, I am seeking guidance on potential legal avenues to address my grievances and recover from the financial and emotional toll this ordeal has taken.
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Lawyers are available now to answer your questions.
1) it is necessary to peruse Franchisee agreement entered into by you
2) correspondence exchanged with the company
3) if there is arbitration clause in your contract invoke the arbitration clause for resolution of disputes
4) contact a local lawyer and send legal notice to the company
You issue a legal notice to the company explaining all the hardships that you faced due to their poor support, service and quality.
You can write the details of all the problems you faced due to them one by one in the chronological order and hold them responsible for all the losses you suffered.
you can prepare an estimation of the loss that you suffered and demand the same from them with interest.
Failing to get a positive response or no response, you may approach civil court with a suit for recovery of damages by filing supporting documents to establish your pleadings towards the cause of action.
Your case may not be entertained by consumer redressal commission.
Send a legal notice to the Goa based Company which had signed with you the franchisee agreement for having misguided you from the beginning itself thereby causing you both financial loss as well as your reputation. In case of no positive response received from the Company, file a case in the jurisdictional competent Court to recover your loss.
You will have to check in your contract what is the agreed dispute resolution mechanism
Is there any arbitration clause in the franchise agreement?
If yes then you will have to invoke arbitration
And arbitration will be expensive
Infact any litigation is expensive
You are already facing financial issues. So litigation will add to your financial losses if ultimately your claim is rejected either by the court or the arbitrator
Such situations are best resolved by mediation and negotiations
Dear Client,
Start by thoroughly reviewing the franchise agreement you signed with the company. Pay close attention to any clauses related to support, training, and obligations of both parties. Understanding your contractual rights and obligations will help you assess the situation better. Keep detailed records of all communications with the company, including emails, letters, and phone calls. Document any promises made, lack of support provided, and financial losses incurred as a result of the company's actions or inactions. This documentation will be crucial if you need to take legal action or negotiate a resolution. Despite the company's previous lack of assistance, continue to communicate with them in writing about your concerns and the issues you've encountered. Clearly outline the problems you've faced and the losses you've incurred. Request their cooperation in resolving the issues and recovering your losses. Many franchise agreements include clauses requiring disputes to be resolved through mediation or arbitration rather than litigation. If your agreement has such a clause, consider initiating mediation or arbitration proceedings to resolve the issues with the company in a more cost-effective and efficient manner. If the company has materially breached the franchise agreement or failed to provide the support and services promised, you may have grounds for termination or renegotiation of the agreement. Given your current financial strain, consider seeking assistance from financial advisors or debt counselors who can help you manage your debts, renegotiate loan terms, or explore options for debt relief. If the situation proves untenable and the company is unwilling to cooperate in resolving the issues, you may need to consider exiting the franchise agreement altogether.
Given facts are not sufficient. Franchisee agreement is required to be examined minutely along with details of meeting of parties etc are required to be examined in order to suggest course.
I understand you're in a difficult situation with your franchise agreement. Here's some guidance to help you navigate this:
Potential Legal Avenues:
Breach of Contract: The franchise agreement likely outlined the franchisor's responsibilities regarding support, training, and disclosures. Their failure to provide proper information on RTO TC and inadequate training could be considered a breach of contract.
Misrepresentation: If the company misrepresented the ease of obtaining TC or the quality of vehicles, it could be misrepresentation.
Consumer Protection Act, 2019: This act protects franchisees from unfair trade practices. The company's lack of support and the failed rental program might fall under this act.
Recommended Course of Action:
Review the Franchise Agreement: Carefully examine the agreement to understand the specific rights and obligations of both parties. Look for clauses related to training, support, disclosures, and dispute resolution.
Gather Evidence: Collect documents like the agreement, communication records (emails, calls), receipts, and any proof of promised but undelivered services (training materials).
Consult a Franchise Lawyer: A lawyer specializing in franchise law can analyze your situation, assess the strength of your case under the mentioned legal avenues, and advise on the best course of action.
Consider Mediation: Before initiating legal proceedings, explore mediation with the franchisor. A mediator can facilitate a discussion to reach an amicable settlement and avoid the cost and time of a lawsuit.
Recovery of Losses:
Damages: You might be able to seek compensation for financial losses caused by the franchisor's breach of contract or misrepresentation.
Contract Termination: Depending on the severity of breaches, you could potentially terminate the franchise agreement and seek reimbursement of your investment.
Additional Tips:
Regards,
Arunkumar Khedia
Advocate Bombay HighCourt
You can only face issues of breach of contact or performance in the said matter
Share your franchisee agreement. Legal solution may come out from the contents of agreement only.
