Legal Question in Business Law in Tennessee

Franchisor's Responsibilities in Transfer

As an existing franchisee, we approached the franchisor about buying some of another existing franchisee's territory (after selling our area). We were encouraged to do this and told that we would receive their assistance throughout the process. The purchase agreement was created by the franchisor and was based on revenue - the price would be either one amount if the revenue was at a certain level or a different amount (less) if the revenue was less. We sold our area and was told we needed to send our money in for the new area and that they would not release the money to the seller till they had fulfilled all the terms of the agreement. However, they did not verify the revenue numbers and gave the seller the full amount. We believe it was the franchisor's responsibility to make sure the terms of the purchase agreement were fulfilled. Now we are trying to understand what our options our to have the money that was overpaid refunded. The franchisor is taking the position that it's between us and the sellers (also one of their franchises) and is trying to remove themselves from any responsibility in the situation.

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