1. Assessing the Validity of the Franchise Agreement
At the start of the consultation, the franchise attorney evaluated whether the franchisor had complied with New York’s franchise disclosure and training obligations.
This early analysis revealed that core legal requirements had been breached.
Under New York’s franchise laws, these omissions strongly favored contract rescission.
Failure to Provide Required Training
The franchisor collected approximately 7 million KRW (roughly USD 5,000) labeled as trademark usage and training fees, yet provided no substantive training on food preparation, operational procedures, or material handling.
A franchise attorney immediately recognized this as a material breach that undermined the foundation of the agreement.
New York courts often consider the absence of promised training as evidence of misrepresentation.
Because the franchisee relied on these assurances, the failure to teach essential skills justified rescission.
This violation aligned closely with the statutory protections designed to prevent deceptive franchise practices.
Misrepresentations Related to Franchise Operations
As the business began operating, the franchisee noticed inconsistencies and unusual operational directives from the franchisor.
A franchise attorney investigated these issues and discovered that the franchisor had been violating New York regulations governing franchise disclosures and operational controls.
Such misrepresentations allow a court to void the franchise agreement.
The franchisee’s reliance on false or incomplete information strengthened the legal grounds for refund and termination.
This shows how legal intervention can reveal hidden regulatory issues that ordinary business owners cannot easily identify.
2. Establishing Grounds for Rescission and Refund
Once the violations were confirmed, the franchise attorney built a comprehensive rescission strategy, focusing on the illegal collection of training fees and the franchisor’s regulatory breaches.
New York law supports rescission when the franchisee is misled or deprived of essential contractual benefits.
Documenting Legal Violations and Financial Harm
The attorney gathered payment records, communication logs, and marketing materials to show that the franchisor never intended to provide real training.
New York jurisprudence often views this pattern as deceptive conduct.
With the support of a franchise attorney, the franchisee could show that the collected fees served no contractual purpose.
The documentation also connected these violations to measurable financial loss.
Legal Strategy and Court Submission
The franchise attorney prepared a filing arguing that the franchisor’s actions constituted material breach and statutory non-compliance.
This included evidence of unfulfilled obligations and violations of New York’s Franchise Sales Act.
The legal strategy emphasized that the franchisee entered the contract based on false assumptions created by the franchisor.
This structured presentation persuaded the court that the agreement should be voided and the fees refunded.
3. Court’s Evaluation and Determination
When presented with the evidence, the court assessed whether the franchisor’s conduct violated statutory disclosure rules and contractual expectations.
The analysis supported the position the franchise attorney had advanced throughout the case.
The court agreed that the franchisee never received what he paid for, rendering the contract unenforceable.
Court’s Recognition of Deceptive Practices
The court noted that the franchisor’s complete failure to provide training was incompatible with basic franchise obligations.
A franchise attorney understands that courts often view such failures as proof of unlawful inducement.
The judge concluded that the franchisee’s payments had been wrongfully collected.
This determination reaffirmed the franchisee’s legal right to full reimbursement and contract cancellation.
Full Refund of Franchise Fees Ordered
The legal arguments persuaded the court to order the full return of the 7 million KRW payment.
New York law allows the rescission of franchise agreements when the franchisee receives no material benefit.
With the help of a skilled franchise attorney, the franchisee recovered the entire amount.
The result served as a reminder that franchise purchasers must receive what they were promised under law and contract.
4. Lessons for Future Franchisees
This case highlights the essential role of a franchise attorney when evaluating franchise opportunities and enforcing contract rights.
Many franchisees sign agreements without understanding statutory protections available in New York.
Engaging an attorney early can prevent long-term operational and financial harm.
Practical Guidance for Franchise Buyers
A trained franchise attorney can help prospective franchisees verify franchisor credibility, review disclosure documents, and evaluate fee structures.
Key lessons include:
• Ensure training obligations are clearly defined.
• Confirm that financial requirements match disclosed services.
• Request transparent operational guidelines before signing.
• With careful review, franchisees can avoid deceptive practices involving overcharged fees and nonexistent support.
Significance of Legal Counsel in Disputes
When disputes arise, a franchise attorney can quickly detect statutory violations and prepare a strong case for rescission or damages.
Legal representation ensures that franchisees are not left alone against franchisors who misuse authority.
Through strategic litigation or negotiation, attorneys protect the investment and rights of individuals entering franchise systems.
24 Nov, 2025
