My brother lent his name to start a small grocery store he did not put any money down
just started the buisness under his name
the people who financed the store have owned it for over 7 months and have not paid my brother any thing as of yet
can he justify a percentage?
Asked on 7/20/10, 11:38 am
1 Answer from Attorneys
Kevin B. Murphy
Franchise Foundations, APC
Any franchise attorney will say the time to get agreement on a percentage royalty was in the beginning. He can try to negotiate something now, using the leverage that they will need to remove his name if an agreement is not reached. Having his name (personal name?) in a business opens him up to potential liability if someone sues the store. He needs to make sure they have insurance covering this risk, with an appropriate limit ($1 million or so). Consult with a good business attorney in your area for specific advice.
Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise
Franchise Attorney
Answered on 7/20/10, 2:52 pm
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