Kevin Donahue
Junior Member
What is the name of your state? Florida
Thank you in advance. I own a franchiese that is bleeding money. The parent company did an audit on my business and said I owed them 49K, even though I didn't think I owed them a penny. I contacted a lawyer who told me that to fight them would cost a lot of money, it would be better to sell the business and walk away. At the time I was a couple months behind on my monthly fees and monthly payment to the franchisor so I didn't think they would be willing to do anything. They told me that I needed to put 20% down before they would finance the 49K note, to which I told them that they knew I couldn't do that because I was already behind on my payments. They then asked for 10%, still I couldn't. Finally they said they would put it all in a note at 10% interest and if I didn't agree to that they would put me in breach. I told them that I couldn't make those payments and they knew it, but I would sign it if I could sell the business. When they sent me the papers they included a personal guarentee that we never agreed to (everything is in my corporations name), they told me that I had to put the signed contract in the overnight bag and have it back in their hands within 24 hours or they would breach me and they wouldn't allow me to sell. I know it's stupid but I felt forced because if they breached me my business is gone and all the other creditors that are waiting for their money wouldn't be real happy. As predicted (and as I told them) I can't make the LARGE payments, in fact I can barely make my note payments. Now they come back, this time they are going to breach me AND go after me personally! My question is, do they have to have some reasonable idea that I can make a payment before forcing me to sign a large payment note? Is there any way out of the personal guarantee?
Thank you in advance. I own a franchiese that is bleeding money. The parent company did an audit on my business and said I owed them 49K, even though I didn't think I owed them a penny. I contacted a lawyer who told me that to fight them would cost a lot of money, it would be better to sell the business and walk away. At the time I was a couple months behind on my monthly fees and monthly payment to the franchisor so I didn't think they would be willing to do anything. They told me that I needed to put 20% down before they would finance the 49K note, to which I told them that they knew I couldn't do that because I was already behind on my payments. They then asked for 10%, still I couldn't. Finally they said they would put it all in a note at 10% interest and if I didn't agree to that they would put me in breach. I told them that I couldn't make those payments and they knew it, but I would sign it if I could sell the business. When they sent me the papers they included a personal guarentee that we never agreed to (everything is in my corporations name), they told me that I had to put the signed contract in the overnight bag and have it back in their hands within 24 hours or they would breach me and they wouldn't allow me to sell. I know it's stupid but I felt forced because if they breached me my business is gone and all the other creditors that are waiting for their money wouldn't be real happy. As predicted (and as I told them) I can't make the LARGE payments, in fact I can barely make my note payments. Now they come back, this time they are going to breach me AND go after me personally! My question is, do they have to have some reasonable idea that I can make a payment before forcing me to sign a large payment note? Is there any way out of the personal guarantee?
