Claim for misleading information provided by frachisor?

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phaidi

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a few years back i had a retail unit, i looked a varius options on what to do with it ie. lease it i then looked at the convience chains ,one came back with impresive business plan i brought it to bank borrowed on this in year one it turned over 40% of projected fig year 2 50% nett result is it cost me half a million euro at least ,businees failed has anyone else been used by these franchise chains to increase there share ?
 
Re: Claim for misleading information?

If (as your title suggests) you're asking whether you can pursue the franchiser to recoup your losses, I very much doubt it. If you use the search function you'll find a number of previous threads which may be of interest.

Franchisee's experience
Franchise Worth The Risk..?
Franchising with a Franchisor in a newly established Irish Franchise
new business start up

I'm no expert, but I don't think anyone will tell you other than that franchising always includes a significant element of risk and that it is up to the franchisee to assess that risk independently, inform themselves as fully as possible, and not rely on the franchiser's projections. If a seller told you a property was going to double or treble in value, you wouldn't take it at face value, would you?
 
Re: Claim for misleading information?

i understand theres always an element of risk but if as experts in there field how could they be so far out with projections some weeks we were 70% of what they predicted
 
Re: Claim for misleading information?

Firstly, is there any chance you could find the punctuation keys on your keyboard as it is near to impossile to read your Posts.

Concerning your question, the counter argument will be as to how much effort you put into the business ?? There is asolutely no sure rule in making a business work. If you took all that the franchise offered, why won't the frachisor run the business themselves. Reality has a major part to play here.
 
Re: Claim for misleading information?

Moved from Askaboutlaw to Askaboutbusiness

phaidi said:
a few years back i had a retail unit, i looked a varius options on what to do with it ie. lease it i then looked at the convience chains ,one came back with impresive business plan i brought it to bank borrowed on this in year one it turned over 40% of projected fig year 2 50% nett result is it cost me half a million euro at least ,businees failed has anyone else been used by these franchise chains to increase there share ?
Click to expand...
As suggested by please use punctuation!
 
It is difficult to read and nearly impossible to understand your initial post - you're not being offered a punctuation/grammar/spelling lesson, you're being told that, if you want advice, please post a coherent question and people will be happy to help with their knowledge/opinions. I couldn't understand your first post myself.

Sprite
 
D'ont talk to me about Franchises. A long long time ago now, I had a decent sum of money having split up with my partner and sold our house. I was back living with my mum and investigated seriously taking on a franchise option and the one I delved most into to was a Domino's pizza franchise in Tallaght as a friend of mine has is involved in franchising (pizza) with two outlets. He was going to get involved at the time with me too having been through the set up twice before. I was convinced it would have worked and did my own projections apart from his etc apart from the franchisors blurb. I think it would have cost me about IR£90K+ initial outlay and substantial borrowings but ultimately I was afraid to take the chance.

That particular branch turned out to be the most successful Domino's franchise in the world at one stage, dont know about now. My friends still slag me off over it and get great mileage out of it because they remember how near I was to going for it. C'est la vie!

To the OP - I remember some of the draft legal paperwork was very tight from the franchisors favour, read your contract, all they would have given you were projections, I suppose its like when you sign up for an investment product. Also, some franchises are a lot stronger than others.

Sorry to hear it has not worked out for you.
 
Mandac, maybe just as well, you would have felt responsible for all the fat people in Tallaght, gorging themselves on your pizza. I think I remember reading about huge sales alright but high obesity in the area. So you're hopefully now in a much healthier profession.

Hey Phaidi, your original post is quite clear to me, this forum attracts
pedantic types who are easily irritated by punctuation, grammar issues,
so just ignore them.

You need a good solicitor (not for your spelling mistakes)
 
I honestly didn't understand the post. It was completely unclear to me whether OP was the franchisee or he leased to a franchisee or what. And a fairly polite request by two posters to clear things up was met with a very brusque reply. If I ignored posts by ajapale and Mercman, I'd miss out on lots of great info and be the poorer for it.

Sprite
 
If I understand the OP correctly, he opened an outlet as part of a franchise agreement, and the business failed, He is now claiming it failed because the franchise's chains original financial predcitions were completely overstated. Is that correct?

If what he is saying is true, then firstly, why did he not carry out an appropriate due diligence of the franchise companies predictions and on the area to see if they were viable.

Secondly, why would the franchise chain give overstated projections, If the shop has gone bust, they're potentially out of pocket also, both in financial terms and reputational terms

Lastly, could this have failed not because the franchise chain over-predicted their forecasts, but because the OP was incapable of running the business. Sorry if this is blunt but it's always easier to say it is someone else's fault

If the OP could post a coherient legible post with more detail on it, he would get more constructive and helpful advice.
 
Mpsox said:
Secondly, why would the franchise chain give overstated projections,
Click to expand...
Why would'nt they ? It helps them sell the franchise / make money / expand their brand name. The original poster is not alone - I know of many people who, for example, invested considerable sums of money ( five figures ) in businesses who exhibited at the Franchise show in the RDS Dublin some years ago, only for their businesses to fail. There are probably some successful and reputable franchisors but be careful.
 
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