Florida Franchise Law: Holding a Franchisor Liable for Material Misrepresentations
Becoming a franchisee can be a lucrative and enticing business opportunity. That being said, for your company to truly thrive, you must work with a reliable franchisor. By the very nature of the commercial relationship, franchisees are required to place some level of trust in their franchisor. When the franchisor improperly or unfairly violates that trust, they must be held accountable.
Florida law offers important legal protections to franchisees that operate within the state. If you are a franchisee and you suffered financial damage as a result of material misrepresentations made by the franchisor, you can hold them legally liable. Here, our Miami franchise law attorneys provide an overview of the most important things franchisors need to know about Florida franchise law and material misrepresentations.
Florida Franchise Law: Material Misrepresentations
Under Florida law (Florida Statutes § 817.416), a franchisor can be held legally liable for damages sustained as a result of a material misrepresentation made to a franchisee. As a starting point, this law applies within the context of franchisor-franchisee relationships and in the context of franchisor-distributor relationships. Notably, this definition is somewhat more broad than the definition used by the Federal Trade Commission (FTC). Florida law provides more protection to franchisees than does federal law in most cases. Through a claim under this state statute, a franchisor can potentially be held legally liable for:
- Misrepresentations regarding the reasonable prospects of commercial success for the franchisee or distributorship;
- Misrepresentations regarding the total amount of the investment involved in becoming a franchisee or distributorship; and
- Misrepresentations or omissions regarding how many other franchise or distributor relationships have been or will be established in the same market.
If you operate a franchise or own a distributorship and you believe that material misrepresentations we made by the franchisor, it is essential that you consult with a qualified Miami commercial litigation attorney as soon as possible.
Once again, the three primary issues that are covered by Florida’s Franchise Misrepresentation Act are prospects of success, the true extent of the investment, and the efforts at license competing businesses within the same market. Material misrepresentation on any of these grounds may be good cause to bring a claim.
Of course, misrepresentations can occur in many other ways as well. Beyond a claim under this specific statute, your business may also have a more general commercial fraud claim. Regardless, it is crucial that your case is reviewed by a skilled Florida franchise law attorney. You have limited time to take action.
Get Help From Our Miami, FL Franchise Law Lawyers Right Away
At Pike & Lustig, LLP, our Miami franchise law attorneys have the skills and experience to represent franchisees throughout Florida. If you suffered losses because of material misrepresentations made by a franchisor, we are here to help. Please do not hesitate to contact us today for a confidential consultation. In addition to our law office in Miami, we also have an office in West Palm Beach.