Franchise headaches - can I get my money back

[mymar]

This is my first post. Sorry it is so long!

I have wanted to run my own business for a long time. Last year I saw an opportunity to take on a franchise which was advertised as producing a reasonable income and fitting in with family life. I knew it wouldn?t make me rich but it seemed attractive and I decided to go for it.

Unfortunately the reality has turned out to be very different. The business plan they gave me, supposedly based on an existing franchise, has turned out to be pure fantasy. Costs are much higher than they suggest and income is much lower, not helped by continual compulsory promotions meaning I have to give stuff away for free or at very much reduced prices. The national advertising they talked about has been completely non-existent. It seems their only effort to promote the brand is to have a website.

There were warning signs from fairly early on in the form of a series of broken promises. They said they would pay for my accommodation when I attended training. They didn?t and claim they cannot remember making any such promise. They said I would get an additional £500 of marketing materials. That eventually turned into £500 pay-per-click advertising on Google but even that does not seem to have been delivered. If it has it didn?t produce a single lead. At one point I was told that they would guarantee that I would get my investment back within 18 months, returning the money themselves if I didn?t. That guarantee did not appear in the contract and it seems it will not be honoured. I should note that the contract is on their standard terms and conditions and includes an ?entire agreement? clause.

The final straw came last month when they started another compulsory promotion. Without going into details, taking part would involve me working 50+ hours per week for 3 months and spending a further £2000 - £3000 (on top of the £13000 I have lost already) for no return. I therefore decided to cut my losses and end the franchise agreement.

It seems this isn?t the end of my problems. They told me I had to return all saleable stock. The only relevant clause in the contract says ?Upon the termination or expiry of the Agreement for any reason? the Franchisee shall permit X to purchase at cost such of the sound saleable stock of Products as it shall specify?. There is nothing else that gives them the right to demand return of stock. However, they are refusing to pay for the stock, saying that this clause only applies when they terminate the agreement. They are also suggesting that my notice to terminate the agreement runs from when I returned the stock, not from when I actually gave notice, so that I will have to pay an additional month?s management fee. They also want me to sign a new agreement which states, amongst other things, that I release and discharge them from all claims or demands in connection with the agreement including claims for negligence. I have not signed this agreement.

I know I am not alone in having problems. Almost 20% of their franchisees have given up recently as they haven?t been able to make it work and I believe a similar proportion are thinking of doing so.

If they had paid for the stock and not tried to get more money from me I would probably have walked away from it but their attitude has made me angry. So, legal experts, can I make them pay for the stock I have returned? Can I refuse to pay the additional month?s management fee? And do I have any grounds to sue them and recover at least some of the money I have lost?

I know I will have to see a solicitor if I want to go forward with this but I would appreciate some advice before I do so. I don?t want to throw more good money after bad.

Thank you for reading this far.