Vicksburg, MS asked in Business Formation and Business Law for Mississippi

Q: I was needing to know if u can be sued for opening a franchise in Ms,that the same franchise is already operating in Ms

was needing to know if you can be sued for opening a franchise in Ms, that the same franchise is already operating in Ms. Or can the owner operating under a franchise name, stop another individual from opening a business in a different location operating under the same franchise name?

2 Lawyer Answers
Nashir Ahmed Kushol
Nashir Ahmed Kushol

A: In general, the ability to open a franchise in a specific location, such as Mississippi, and whether an existing franchisee or the franchisor can take legal action against a new franchisee depends on several factors:

1. Franchise Agreements: The rights and obligations of franchisees are typically governed by the terms of the franchise agreement. This agreement should outline any territorial exclusivity rights, which might prevent another franchise from opening within a certain area.

2. Territorial Rights: Some franchise agreements grant exclusive territorial rights to a franchisee, prohibiting other franchisees from opening within that specified area. However, if the agreement does not specify territorial exclusivity, another franchisee may be able to open a franchise in the same region.

3. Franchisor Policies: The franchisor (the brand owner) usually has policies about how close franchises can be to one another. This is often part of their strategy to maximize market coverage without causing internal competition.

4. State Laws: Each state may have specific laws that impact franchises. Mississippi law would apply in your case and could have provisions regarding franchise operations.

5. Litigation Possibilities: If a franchisee believes their rights under the franchise agreement are being violated, they may potentially sue the other party. This could be a suit against another franchisee for violating territorial rights or against the franchisor for not upholding the agreement's terms.

It is crucial to review the specific franchise agreement and consult with a legal professional experienced in franchise law to understand your rights and obligations fully. If you are considering opening a franchise in Mississippi, I would strongly advise consulting with a local attorney who can provide detailed guidance based on your specific situation. As Legal Advice BD, I emphasize the importance of personalized legal counsel for such matters.

Derek Allen Colvin
Derek Allen Colvin

A: Its not clear what exactly is occurring in your case, but you should consult with a franchise attorney in your area to discuss. Anyone can file a lawsuit, but not all law suits are viable or filed in good faith.

If you signed a franchise agreement with a franchisor granting you the right to operate in a specific territory, the franchisor should not have granted those same rights to anyone else. Likewise, if the franchisor signed an agreement granting an exclusive territory to someone else, they should not have sold a franchise to you. Franchisors do not typically grant state-wide territories, except as part of a master agreement.

A franchise attorney can give advice on how to proceed when they understand your rights under the franchise agreement and what is being alleged by the third party.

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