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Author Topic: Franchisor Cheating  (Read 232 times)

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Offline yogsej

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Franchisor Cheating
« on: July 04, 2017, 07:50:06 AM »
Hi

This is an in depth account of my issue please study carefully and guide as I will hire one of the best responder as my legal aid

I am based in Gujarat, the Jurisdiction of my issue is Maharashtra, Mumbai

Five years back I had entered in to a franchisee agreement with a multinational brand five years back, the franchisor company has its corporate office in Mumbai

Initially the relation and support went good and I was offered 16 more stores in Ahmedabad, Vadodara, Surat, Delhi and Mumbai and a security deposit of 2 Cr was taken against the MOU

Gradually I took over 8 stores signed under the MOU 4 each in 2 brands owned by the company and around 1.07 Cr of deposit was adjusted against the fixtures of the stores and interest was coming regularly on the pending amount on monthly basis

In March 2014 the company sold one of the brands and the problems started, Our deposits for inventory for all 8 stores were in old company and the MOU was intelligently drafted that it remained with them, the brand A remained with A1 Company and Brand B was taken over by B1 company

Over excess deposit and inventory deposit for both brands was with A1 company and brand A sales started falling and we could achieve our break even

In Mar16 Company A1 changed it's business model from sale or return to outright purchase which we are not good at, so after lot of issues we handed over three stores to company A1 on 31Oct2016, at tis stage the company expressed it's inability in returning the deposits worth 1.2 cr immediately and if we continued our capital would have washed away because of lack of our experience in this model of business, so we entered in to an agreement that they will return our deposits latest by 07 August 2017
and will regularly pay us interest on monthly basis

In the mean time we will continue one store on old model as security, unfortunately this store is not even meeting our expenses as mentioned above

The Company B1 revised it's MOU in Nov16 and asked for deposits on inventory so we approached company A1 to return us our deposits which they expresses inability

On repeated conversations and personal meetings company A1 is giving reassurances saying it has just started recovering from the new model and are working on clearing our dues, but with interest piling up and the principal amount being huge I am concerned with hardly a month left

Here are my queries :

1] Company A1 has given me in writing through authorized signatory that they will clear all dues on or before 07 Aug 2017, if the company fails when can I initiate legal action?

2] The CMD stays in London but is on an Indian passport, what action can be taken?

3] The company is doing business how can we recover? What is forceful winding of the company?

4] What legal actions can be taken ?

5] Are there chances that court can allow him go bankrupt at any stage and my money can not come at all ?

6] He Owns only vehicle in India? Office is rented ?

7] Stores are given to franchisee and stocks sold o franchisee ?

Please advise and I would like to hire a legal aid asap

Thanking you in anticipation
Regards

 

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