Franchisee fraud in franchise agreements

Posted on Tuesday, February 9th, 2010 at 3:34 am    

Many large and successful companies generate their profits through a franchise organizational structure. This structure typically includes agreements between a larger corporate entity and smaller franchisees. 

This arrangement is most typically found in fast-food chains, where the corporate entity manages the restaurants brand and centralized functions while franchisees manage the day-to-day operations of the business. 

To ensure that franchisees maintain the image of the brand and generate earnings for the larger company, they are often required to sign a franchise agreement. This agreement typically outlines certain provisions such as the business setup and the revenue-sharing plan. 

Fraud can occur in these arrangements if the franchisee illegally breaks one of the agreement's provisions. For instance, if the franchisee underrerpots earnings in order to keep more earnings for himself or herself, then the franchisee has committed a contract fraud. 

If your business has been a victim of a franchise agreement fraud, contact the Des Moines business fraud attorneys of LaMarca Law Group, P.C., at (877) 327-2600. 


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