Should I file charges against a franchise owner?

Franchise 12 views 5 answers
I talked to a franchise owner about an investment plan. The first small step was $1500 (It took about three month my hard work money to save money for investment). I gave it to him in cash and he was impressed, so he wanted me to move on to the next step and he claimed the next step was no money required to put it down. He changed his plan and he wanted $2500 and I gave it to him. He said he would return my money back. It took him about three months for $2500 to return my money back. After that, I should get a job right away, I have tried to get in touch with him through a phone call, text messages and email messages and no luck yet. I still have some concerns I would like to ask him. My co-worker talked to him a several times and there was no problem for him to get in touch with him.

Attorney Answers

5
William Scully ·
You're coming in broken and unreadable, friend. It sounds like you think this person has run off with your money. The problem is I don't know what you mean by an 'investment plan.' It may be necessary for a person who sells 'investment plans' to be a registered securities broker. All in all, though, this sounds kind of shady. It might be criminal, but I can't tell from what you've told us. Probably the best thing is for you to consult your family attorney.
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Michael Strickland ·
Hopefully, you have a contract or some type of agreement the both of you signed. you may want to explain what was going on and i think most of us could advise you once we have more information.
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Mary Clapp ·
I can't tell from your question whether you were purchasing a partial interest or a full interest in an existing business or whether you were purchasing a NEW franchise from the franchisor. Either way, you may have rights, and you should contact an experienced business and franchise attorney in your area. If you were purchasing an "investment" or "interest" in an existing business, the securities laws would be implicated, and the "seller" would have been required to provide you with a private placement memorandum which would contain some significant disclosures about the business and the risks you would be taking by investing. The PPM would also disclose either that the investment was exempt from the federal and AL securities laws pursuant to specific statutory exemptions OR that the security was registered. If you were purchasing a New franchise from a franchisor, the franchisor would have been required to provide you with a Franchise Disclosure Document which contained certain disclosures and contained Specific disclosures about any financing the franchisor was offering, including copies of all contracts. If you were purchasing an existing franchised business from the existing franchisee, chances are that the franchisee would have to obtain the approval of the franchisor, and the franchisor would require as a part of the approval process that you review its FDD. It sounds like these steps may not have happened in your case, and, if so, there may be violations which entitle you to a return of your money. From your question, it sounds like you may have gotten your money back. If so, you should count your blessings. If not, you should gather any documents and communications you have had and take them to an experienced business and franchise lawyer as soon as possible.
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Matthew J. KreutzerFranchise LawyerLas Vegas, NV ·
I agree with my colleagues that it's difficult to tell from your question whether you were attempting to purchase a franchise from the franchisor (the franchise company), or if you were purchasing an interest in an existing franchise from the franchisee (the individual franchise owner). In either case, it sounds like something fishy was going on with this "investment opportunity." You should talk to a local attorney and give her or him a full explanation of the facts to evaluate your options. That being said, it sounds like you "invested" $2,500, and the $2,500 was returned to you; you are apparently upset that you did not get a job with this franchise owner? Am I understanding that correctly? If that is the case (the other person returned your entire investment to you), it's difficult to see that there would be any substantial damages here. I'm not sure it would be worth the time, money, and emotional investment to try to take legal action here.
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Raymond Lewis Jackson Jr.Social Security LawyersAuburn, AL ·
I would contact the Alabama Securities Commission. Here is a helpful link http://asc.alabama.gov/complaints.aspx You should determine if this person is licensed to sell "investments." I also think that you should consult with an attorney in your area to see if you have other remedies.
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