Andrew Rubin, Esq.

Breach of contract claims result from abrupt franchise closing

Everyday there are reports of breach of contract claims between two or more parties. Disagreements, such as employment or partnership disputes, are fairly common and come in all shapes and sizes. The courts in New Jersey consider these claims every day, in an attempt to determine the underlying facts and arrive at a fair and just determination.

A typical example is the story of a woman who took over a Kumon after-school teaching franchise and turned into a profitable business. After moving her business to a better location in Newburgh, New York, she signed a five year renewal of her contract for the franchise. Just seven months later, Kumon terminated her contract and gave her six months to either sell the business or close the operation. She thereafter sued for breach of contract, wrongful termination, unjust enrichment and violation of New Jersey's Consumer Fraud Act.

Because the franchise owner could not find a buyer in such a short period of time, she was forced to close the Center. The lawsuit seeks money damages, including the $500,000 she says her franchise was worth before Kumon's wrongful termination of the franchise agreement. For its part, Kumon says it does not comment on pending litigation. The company added that it believes its actions were "fair, appropriate and most importantly, in the best interests of the students. " The woman responds that she believes Kumon's change in focus, putting increased emphasis on growth and the number of students at each school, is at the core of the dispute.

The case will now wend its way through the New Jersey courts. While the outcome remains to be seen, the case demonstrates the need to seek legal intervention when rights have been violated. A New Jersey attorney experienced in handling civil litigation and appeals may offer some support and help those with breach of contract claims press for a successful and equitable resolution.

Source: NorthJersey, "Former Kumon franchisee cries foul over center closing," Hugh R. Morley, Sep 19, 2011

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