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 Business issue, Business dispute

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TScedric1121
post Jun 18 2017, 05:38 PM, updated 7y ago

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I have gone into a franchise business 1 year before the franchisor manage to obtain the registered franchise. Start up till now, they never present any franchise agreement for us to sign and we have been paying royalties to them as we are using it trademarks.

Presently, the franchisor asking us to sign the agreement but without giving us a copy go through and discuss the term and condition.Our company decided not going to continue the relationship with them and they offering the price to take over us is 50% lower than our asset book value.

Did they breach the franchise act as they never present official document to us and sell it franchise before obtaining the registered franchise approval?
Are we eligible to continue the business by our own company without it trademark as we are in education industry, we need to responsible to our student complete the remaining courses and we got the ability and qualification to conduct own courses.

NightHeart
post Jun 18 2017, 07:51 PM

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QUOTE(cedric1121 @ Jun 18 2017, 05:38 PM)
I have gone into a franchise business 1 year before the franchisor manage to obtain the registered franchise. Start up till now, they never present any franchise agreement for us to sign and we have been paying royalties to them as we are using it trademarks.

Presently, the franchisor asking us to sign the agreement but without giving us a copy go through and discuss the term and condition.Our company decided not going to continue the relationship with them and they offering the price to take over us is 50% lower than our asset book value.

Did they breach the franchise act as they never present official document to us and sell it franchise before obtaining the registered franchise approval?
Are we eligible to continue the business by our own company without it trademark as we are in education industry, we need to responsible to our student complete the remaining courses and we got the ability and qualification to conduct own courses.
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Legally I'm not sure.

But what's the possibility of changing the brand name & continue operation? Like ChaTime changed to TeaLive & continue business as per normal. There's still ChaTime in Malaysia but majority converted to TeaLive.
TScedric1121
post Jun 19 2017, 08:22 AM

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QUOTE(NightHeart @ Jun 18 2017, 07:51 PM)
Legally I'm not sure.

But what's the possibility of changing the brand name & continue operation? Like ChaTime changed to TeaLive & continue business as per normal. There's still ChaTime in Malaysia but majority converted to TeaLive.
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Actually, actually we have not issue on changing it and operate as normal as we still have the premises and facilities.
NightHeart
post Jun 19 2017, 10:04 AM

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QUOTE(cedric1121 @ Jun 19 2017, 08:22 AM)
Actually, actually we have not issue on changing it and operate as normal as we still have the premises and facilities.
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If no issue, then change the name & continue operating as per normal.
TScedric1121
post Jun 19 2017, 03:10 PM

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QUOTE(NightHeart @ Jun 19 2017, 10:04 AM)
If no issue, then change the name & continue operating as per normal.
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But legally can I continue? Cos we don't want affect our customer due to our legal issue.
ProSambalEater
post Jun 20 2017, 01:40 PM

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QUOTE(cedric1121 @ Jun 19 2017, 03:10 PM)
But legally can I continue? Cos we don't want affect our customer due to our legal issue.
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legally the agreement between both parties is oral agreement and nothing in written form (based on what u mentioned), so if u go to court, it depends on who has the most argument points to justify any breach of contract
NightHeart
post Jun 20 2017, 02:16 PM

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QUOTE(cedric1121 @ Jun 19 2017, 03:10 PM)
But legally can I continue? Cos we don't want affect our customer due to our legal issue.
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Usually there's a clause in the agreement that prevents you from doing similar business after the end of the contract. But again, depends on how you argue your way out, you may get away with it like ChaTime too.
TBJ
post Jun 20 2017, 07:25 PM

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since never in black n white, you can just change company name and start a new one.
SUSalexcky
post Jun 20 2017, 11:32 PM

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First of all, are they legally register as master franchisor? If not, whatever agreement sign oso no use
TScedric1121
post Jun 21 2017, 03:31 PM

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QUOTE(alexcky @ Jun 20 2017, 11:32 PM)
First of all, are they legally register as master franchisor? If not, whatever agreement sign oso no use
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When we into the business is just a business consultancy offer in 2014 but they got the registered it franchise business on 2015.
Do that consider?
SUSalexcky
post Jun 21 2017, 04:06 PM

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QUOTE(cedric1121 @ Jun 21 2017, 03:31 PM)
When we into the  business is just a business consultancy offer in 2014 but they got the registered it franchise business on 2015.
Do that consider?
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By right they should have inform u in 2015 to register u as their franchisee. But u need to check with the franchise association whether any law allow u to withdraw without selling the business


TScedric1121
post Jun 22 2017, 04:10 PM

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QUOTE(alexcky @ Jun 21 2017, 04:06 PM)
By right they should have inform u in 2015 to register u as their franchisee. But u need to check with the franchise association whether any law allow u to withdraw without selling the business
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Which department can I check with?
powerlinkers
post Jun 23 2017, 05:30 PM

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QUOTE(cedric1121 @ Jun 18 2017, 05:38 PM)
I have gone into a franchise business 1 year before the franchisor manage to obtain the registered franchise. Start up till now, they never present any franchise agreement for us to sign and we have been paying royalties to them as we are using it trademarks.

Presently, the franchisor asking us to sign the agreement but without giving us a copy go through and discuss the term and condition.Our company decided not going to continue the relationship with them and they offering the price to take over us is 50% lower than our asset book value.

Did they breach the franchise act as they never present official document to us and sell it franchise before obtaining the registered franchise approval?
Are we eligible to continue the business by our own company without it trademark as we are in education industry, we need to responsible to our student complete the remaining courses and we got the ability and qualification to conduct own courses.
*
Better you consult
1.malaysian franchise association
2. go and see a good trade lawyer directly: any small mistake on your part can cost thousands to millions of ringgit. Do not take this matters lightly if you don't want to end bankrupt.

 

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