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Court Watch

By ALM Staff | Law Journal Newsletters |
August 25, 2010

No Absolute Right to Rescind Based on Franchisor's Violation of State Law

One of the consequences feared most by franchisors relating to a violation of state franchise laws is the potential that a franchisee may be able to rescind the purchase of its franchise. A violation of state franchise laws during the sales process can result in the franchisee being able to terminate the franchise agreement and receive reimbursement from the franchisor of all sums paid to it during the franchise relationship (after giving back all tangible materials supplied to the franchisee by the franchisor).

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