Are You an Unhappy Franchisee? Tell us why.

A member of my family is a franchisee for a company which just expanded into franchising recently. As a third party I'd rather not name the company at this point, but I'm at my wit's end trying to help her work through an awful situation.

She's worked extremely hard for three years, used all her savings and burned the candle at both ends. She was making a great success of the business when the crash of '08 brought things to a shocking slowdown (the business fell off by almost 80%). Although she continued to work tirelessly and managed somehow to break even for another eighteen months, ultimately she concluded that she couldn't carry on and notified her franchisors of this decision.

While they've always been unreasonably demanding in my view, now they're actually treating her as if she's an indentured servant and must work off some imaginary debt before they will release her from the contract. They claim she must keep the business going at full tilt and reach continuing (and unrealistic) goals set by them, until such time as a new owner takes over - and Oh yes: they must sign off on the new owner as well (which I can understand to some extent, but come ON). Their requirements for anyone new are virtually impossible to live up to, which of course has resulted in several prospective buyers backing out once they find out what they have to do to please "the Big Kids."

In addition, they continue to require their full percentage of her meager sales, as well as complicated, hugely time-consuming (and redundant) reports and forecasts. (This is a one-person business with only a part-time helper.) They are giving her no assistance in finding a buyer, and in the meantime she has (of necessity) resumed her old job as well - so now she's working more hours than ever. (She works her job at night and the business during the day.) It's impossible to put enough time into finding a buyer - dicey at best right now - although she's trying hard. She also spoke to a lawyer who was little or no help.

I find it extremely hard to believe that what these folks are demanding is altogether legal, and in any case it positively screams poor business practices! They would be far, FAR better off to let her bow out, pass the baton to someone else or liquidate entirely and get on with it.

Does anyone have advice or perhaps clarification about franchise contract law? She seems to have been convinced by the franchisors that they hold all the cards and she has no choice but to knuckle under until she can find a way out. I know that ideally, she should sell the business with all its assets to someone new - but if that proves impossible (and it's been six months already since she announced her intent), what would happen if she simply walked away (liquidated, cancelled customer orders) and told them she has exhausted every possibility? They keep threatening to sue her if she doesn't fulfill their ongoing requirements, but that seems Draconian to me. I can't believe they can get away with this - someone help me understand!

At this point I'm fearful for this woman's health. She's exhausted, stressed to the maximum and unhappy. Every effort she's made to have a reasonable, rational conversation with her franchisors has resulted in them bullying her by phone. I'm about ready to fly to their city and grab someone by the lapels.

Sorry for the long posting - but it's very difficult to watch someone you love putting up with this irrational approach to a business that's already on thin ice. It defies logic in the first place: it would plainly be in their best interests to ease up on her, then allow her to do what's necessary.

Help....???