Ok, here we go. If you are even contemplating buying a franchise then you absolutely must know this next piece of information.

It could literally save you $50,000

So I had told the franchise that I wanted to leave as I was broke and it just was not working.  The franchise responded by telling me I owed them $50,000 and would fight me all the way to get it.

I thought my world could not get any worse before and now it just shattered. How could that be? I hadn’t earnt any money from the Franchise in 6 months so how did I owe them money.

They took great delight in telling me that I had signed a legally binding contract that meant I owed them that money. When I looked into it further, I realised they were right.

 You see, this Is how it works -

I had signed a five year Franhise Agreement that had a % of turnover paid to the Franchise for Management Fees and Marketing. After 1 Year there was a minimum payment set at $500 per month.

Can you see where this is going?

By their logic, and by the Franchise Agreement, if I left I was still liable to pay them 4 Years worth of $500 Dollars per month or $48,000.

Did I pay them?   Well that will be the subject of a later Blog Post..

You need to know this Information…..

So You want to know more about my Franchise Disaster?
I was faced with the decision of kissing goodbye to over $100,000 or trying to continue on with a franchise business that had no success, and didn’t give me any hope of ever succeeding.After much soul searching, I decided that enough was enough and that I would have to close down the franchise and return to work as a wage slave. I was going back into the rat race.

I rang the franchisors and explained my circumstances. I was broke. I couldn’t make the repayments on my house and I just had no more cash. I explained that I was prepared to walk away without trying to chase them for any money back.

All I wanted was my life back.

Do you know what the friendly, caring franchisor said?

Well - it’s a long story. And one that will be covered in more detail in a later blog post but essentially they said that It was not my decision and they would not let me leave.

This was not a franchise that had any retail premises or even physical products to tie me to the franchise. There was no reason why they should insist I stay - or so I thought!

I was broke and I told them that.

What did you think they said?

“Peter, we are not going to let you leave the franchise and if you insist on doing so we are will commence legal proceedings against you to force you to pay us the $50,000 you owe us”

Wow!! When I picked myself up off the floor and could compose myself enough to speak, I had to find out why they thought I could possibly owe them more money.

The answer that I found out amazed me. You need to know it as it could make the difference between you losing a fortune. If I had known about I then there was No Way I would ever have bought a franchise.

Want to know what it is? Read my next post entitled - “The dirty little secret that franchises don’t want you to know”