Hi, I will be opening up an exclusive cell phone store and am entering into a business relationship with a master dealer. One of the terms of the our arrangement is the master dealer has to on the lease with me. The master dealer states the sole reason for this is if I was to exit the business or did not want to do it anymore that the master dealer will be on hook to keep the store open. He says this is at the request of the carrier (the exclusive store we are opening). Is this fairly common? Can the master dealer kick me out at any time? Will this cause legal issues in the future?
Answer
Generally speaking, such a term is common in franchise agreements, however you need to be very careful about the definition of what constitutes "exit from the business" or you may find yourself without the business one of these days. Therefore, your agreement with the master dealer and the lease agreement with the landlord need to be carefully reviewed to make sure there aren't any potential pitfalls.
If you are investing a lot of money in this store you should have an attorney review the agreements. Such a review should not take a lot of time and therefore would not be overly expensive. My firm mostly represents startups and entrepreneurs and we review similar agreements routinely. Please contact my office at your earliest convenience to get things started.
Roman R. Fichman, Esq.
www.TheLegalists.com │ @TheLegalist
email: Info (@) TheLegalists (dot) com
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