Handling Abusive Franchise Agreements: Understanding Your Rights

Q1: Can a franchiser impose additional rules and regulations after the franchise agreement has been signed?

In accordance with the Philippine law, once a franchise agreement has been signed, any modification or addition to the existing rules and regulations must be consensual and in line with the provisions stipulated in the agreement. Therefore, unilateral imposition of additional rules and regulations by the franchiser may be considered a breach of contract.

Q2: What legal remedies are available if a franchiser imposes additional rules and regulations abusively?

If the franchiser is imposing additional rules and regulations abusively, the franchisee can consider various legal remedies, including but not limited to:

Negotiating with the franchiser to amend the provisions amicably.
Resolving the issue through alternative dispute resolution methods, like mediation or arbitration, if such clauses are included in the franchise agreement.
Filing a complaint before the appropriate court for breach of contract.

Q3: Can additional rules and regulations be imposed in light of changing circumstances or legal requirements?

Yes, a franchiser can impose additional rules and regulations to comply with changing circumstances or new legal requirements. However, these rules should not be arbitrary or abusive and must be necessary to adapt to the new conditions, while also respecting the rights and interests of the franchisee.

Q4: How can a franchisee protect themselves from abusive practices by the franchiser?

To protect themselves from abusive practices, a franchisee should:

Clearly define the terms and conditions in the franchise agreement, including a provision on how changes to the rules and regulations will be handled.
Seek legal advice to understand their rights and responsibilities under the agreement.
Maintain a record of all communications and directives received from the franchiser for evidence in case of legal disputes.

Q5: Can a franchisee terminate the franchise agreement due to abusive practices by the franchiser?

Depending on the severity of the abuse and the specific provisions in the franchise agreement, a franchisee may have the right to terminate the contract. It is recommended to consult with a lawyer to assess the situation and guide on the proper legal steps to terminate the agreement, if necessary.

Conclusion

Dealing with abusive practices by a franchiser can be challenging for franchisees. It is important to understand your legal rights and to carefully review the terms of your franchise agreement to protect your interests. In the face of abusive practices, seeking legal advice is often a prudent step to ensure that your rights are upheld according to Philippine law.