I want to file a franchise lawsuit. What should I do?

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I quit my job and opened a franchise cafe. When I first signed the contract, they said no other same-brand business could open nearby, but shortly after, one opened right close by. When I confronted headquarters, they said they couldn't help it — saying something different from when we signed. Since then, sales have dropped severely and I'm struggling. If I file a franchise lawsuit, can I win?

franchise lawsuit

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作者: 박동일

As a franchisee like you, when entering into a franchise business transaction, the franchisor (head office) may be recognized as having violated the prohibition of unfair encroachment on business territory.

If a franchisee suffers damage due to violation of the prohibition of unfair encroachment on business territory, you can claim damages from the franchisor.

In this case, clearly proving that there was intent or negligence on the part of the franchisor becomes the key issue of the lawsuit.

If such a problem arises, you should clearly determine whether the head office's actions are unlawful and whether there was no justifiable reason, and then respond by reporting to the Fair Trade Commission, etc.

However, if there are reasons such as sudden changes in commercial districts due to reconstruction or redevelopment, this does not constitute violation of the prohibition of unfair encroachment on business territory, so you must be careful about this.

Subsequently, if the franchisor causes unfair encroachment on business territory, they will be subject to penalty surcharges from the Fair Trade Commission.

Based on this, the franchisee can file a damages lawsuit against the head office and receive compensation for the damages.

After that, in order to prepare a legal review and defense suited to the current situation, the help of an attorney with legal expertise in the relevant field is important.