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Franchisee wins breach of contract case

The importance of having business agreements in legally binding written contracts cannot be emphasized enough for Florida business owners. However, not every written contract is foolproof as it must be created properly and, of course, honored as written. Without these things, the opportunity for conflicts to arise always remains.

A case involving a Virginia-based tax preparation franchise illustrates all of these points all too well. One franchisee, the owner of eight of the company's stores, had his ability to file tax returns electronically revoked by the Internal Revenue Service at the end of 2015. The following month, the company's Chief Executive Officer made an agreement with him to purshase all eight of his stores and allow him to buy them back after his electronic filing status was reinstated. This was originally expected in the spring of 2016.

When reinstatement proved to be taking longer than exepcted, an employee of the franchisee requested additional time from the CEO during a dinner in Florida. The request was reportedly granted verbally but not in writing. When the employee pursued the request a few months later, she was fired. The CEO also failed to make some payments to the franchisee and may even have accepted a bid from a third party to buy the stores. A court recently ruled that the company breached its contract with the franchisee.

Clearly there are many things that can complicate business matters. People facing these types of challenges may find it helpful to talk with an experienced business attorney in Florida.

Source: The Virginian-Pilot, "Liberty Tax loses $2.7 million breach of contract case with former New York franchisee," Kimberly Pierceall, Jan. 13, 2017

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