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termination of franchise agreement

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C

chicagobusowner

Guest
What is the name of your state?What is the name of your state? IL

I have been owned a franchise in Chicago-land area for almost 2 years. The franchise term is for 8 years with a 6% royalty. I essentially seem to have signed a contract guaranteeing them an annuity of at least $6,000 per year for 8 years. There are minimum sales requirements of $100,000 per year. I have nearly exhausted all savings, and will be unable to meet my debt payments (mortgage, home equity loan) in 4-5 months. I am married with 1 child. Therefore, I am considering returning to full-time employment.

My corporation signed the contract and was personally guaranteed with my name.

My question: Assuming I am unable to sell the franchise and I close the doors...
1. Even if my corporation files bankruptcy, am I personally liable?
2. Are all my and my wife's assets susceptible, or only those only in name?
3. Can they sue for the remaining royalties based on the minimums... $6,000 times 6 remaining years = $36,000.
4. Can they go after my home?
5. Can they go after my 401k/IRA's?

Thanks so much for your advice.
 


B

blameshifting

Guest
You need to have an attorney review your contract and explain your options, it shouldn't be very expensive and you'll get better advice than from people who have no idea what is in your contract.

Often you can negotiate a settlement, your attorney can be of assistance there as well.
 

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