When an entrepreneur decides to open a business, there are a variety of ways to go about it. One common method is through opening a franchise. This means the entrepreneur will work with a franchisor to license the entrepreneur for the use of the franchisor’s successful business model. Generally, within this business arrangement, the success of a Georgia franchisor is dependent on the success of the franchisee. This typically means the franchisor and franchisee are on the same team. When that relationship begins to decay a franchise dispute can arise, requiring legal intervention.
That situation is what seems to have been on display for one particular Georgia business owner and her franchisor, Any Test Franchising, Inc. The franchisor licenses the Any Lab Test Now franchises — private commercial labs that analyze a variety of human specimens, such as blood or urine. Any Test was recently in the middle of a heated legal dispute with one franchisee who alleged the franchisor terminated her rights without legal foundation.
According to reports, the franchisee asserted that the Any Test ended her agreements in order to resell territories she had rights to behind her back. Any Test claimed that the franchisee was in breach of contract because she failed to open additional locations on schedule as called for by contract.
The disagreement sparked a suit from Any Test and a countersuit from the franchisee. Any Test then succeeded in having all the suits terminated and putting the matter into arbitration.
At first, the franchisee had a difficult time getting together the money to pay her share of the arbitration costs. That delayed the case. When the matter finally got a hearing, the three arbitrators ruled for the franchisee, awarding her $340,000.
Franchising investments are often more than simple business decisions. They often reflect a particular passion of the franchisee. That can create deeper-than-usual business relationships. Having a legal team that understands such nuances can be crucial to effective dispute resolution.
Source: Blue MauMau, “Any Test Franchising Hit with $340K Arbitration Award,” Janet Sparks, Nov. 1, 2012