In an attempt to diversify his interests, Allen said the
franchise agreement with Domino's was an ideal opportunity.
It is also important to the franchisor to have the selling franchisee sign a general release stating that no claims or disputes exist for the period their
franchise agreement was in effect.
In either event, the default notice should refer to the specific section of the
franchise agreement that provides for the default, give the factual details that led to the default, warn of Lanham Act infringement if franchisor trademarks are used after termination, provide notice that all post-termination obligations in the
franchise agreement must be followed, state that none of the franchisor's rights or remedies regarding any other obligations under the
franchise agreement have been waived and be sent pursuant to the notice provision in the
franchise agreement.
Initially, one can take a definitive stance that no changes will be made to the
franchise agreement once the disclosure is given.
The amendments to the law have caused all franchisors to review the form of
franchise agreement used in Mexico, as well as the procedures and time involved in the execution of
franchise agreements (including compliance of the disclosure obligation), in order to make them adequate to the new provisions of law, which duly interpreted and reflected by skilled local counsel should not represent a barrier for franchisors and franchisees to continue with the expansion of their business in Mexico.
if the franchisee becomes bankrupt, the trustee in bankruptcy may be able to disclaim the
franchise agreement, leaving the franchisor in the position of being an unsecured creditor for the monies owing, and in respect of any damage claims it may have for default under the
franchise agreement;
The law also contains a two-prong disclosure requirement--disclosures that must be expressly included in the
franchise agreement and those that must be included as "addenda" to the agreement.
Although sophisticated and highly motivated, many potential Kumon franchisees have not previously encountered a
franchise agreement or invested in their own business.
