If a franchisee regrets their decision and no longer wants to proceed with the franchise, can they demand a refund of the franchise fee by citing reasons such as the Fair Trade Act or fraud?
In a court case involving San Liang Pin Tea, the franchisee claimed that, before signing the franchise agreement, the franchisor failed to disclose:
‧ The cost of the initial inventory before operations began;
‧ The items and prices of raw materials required during the franchise period.
However, after investigation, the court found that during the franchise expo, the franchise manual, materials price list, and franchise contract were all explained to the franchisee in detail.
The franchisee was aware of this information, and therefore, the court rejected the refund request.
But There’s a Twist!
The franchisor counter-sued the franchisee for breaching the franchise agreement.
How did the court rule?
Stay tuned for the next episode to find out!
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