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Fraud in the franchisee-franchisor relationship

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Opening an automobile franchise is a major financial investment. It can tax the resources of the franchisee and may push them to their limits in order to achieve their goals of having their own automobile dealership. In Florida, individuals work hard to meet the stringent requirements of opening dealerships and abiding by the terms of their franchise agreements. Past posts on this blog have detailed these and other requirements that dealerships must meet in order to operate in the state.

However, from time to time problems develop in the relationship between franchisees and their parent companies. For example, when a company induces a franchisee to open up a dealership on the promise of financial success, that franchisee may trust that they are making a wise investment with their time, money, and other resources. If those promises are based on fraud, though, the franchisee may soon be in financial peril.

When fraud and misrepresentation exist in the franchisee-franchisor relationship, the law protects harmed parties and allows them to sue for the recovery of their damages. They may sue to recover their financial losses, seek injunctive relief to stop the dangerous practices of the other party, and seek to cover their legal costs for bringing their legal action.

There are no guarantees that Florida automobile dealerships will be successful, but in any business relationship fraud should never be the inducement to make important and financially significant decisions. Florida law protects automobile dealership franchisees from the deceptive practices of others. When these issues arise it is important that automobile dealership franchisees find and work with attorneys who understand how the laws affect their particular businesses.