Is there a lawyer in the house?

[Doom]

Im in no mood to pay a fee to have a chat with my attorney, so I need some vague legal advice, for a friend


Lets just say hypothetically, that you happen to know for a fact that people are violating franchise rules, and that the owners of one of the restaraunts actually convinced said employees to lie to the dept of labor about work status and salary...basically forging documents of starting dates, and annula income, limiting it to the bare legal amounbt of people to run a restaurant in the city of NY

Now I realize that is a direct vioaltion of several laws, and they would most likely be tsosed from the franchise if prooven, but would they have to evict the land...the property is rented, from a completly different source....

basically what there has been some massive tension between parties, and one party is looking to take back 125k that he has invested, but is also looking to make sure that these cocksuckesr cant even get a gas card when he is done with them

what this person is asking, is can the land be forfited due to the illegal activity thats been taking place on there, or is that up to the land owners?

[redsquirrel]

I'm not lawyer, but I'm going to take a shot.I've taken several business classes, so I hope this helps.

Depending on how the individual registered the business with the IRS (LLC, INC., DBA, CORP., ETC) will determine how this should be handled. If the land owner wants to repo the land for this, I don't know what legal grounds he has, unless he fails to make lease payments. The franchise owner is NOT in breach of contract w/ the land owner. He really hasn't violated anyone's contract that would constitute them shutting down. What do salaries and start dates thought have to do with not enough people to run the restaurant? Just clarify for me a bit how he violated labor laws...
However, when it comes to businesses,the way business owners are protected is their personal credit is not effected if the company goes belly up. They simply can walk away. I don't want to rain o your parade, but it's not probable the guy won't be able to get a gas card.
For argument sake, let's say he gets shut down. The land owner will still own the land and one of two things will happen 1) the property owner will try to sell the building back to the franchise and the franchise will search for a buyer. Or 2) the property owner will shut down the restaurant completely and sell it to a totally different buyer. What I'm trying to tell you is that unless the bulding owner defaults on his lease payments to the ppty owner , he doesn't have a leg to stand on. Even if he does get shut down, and continues to make his lease payments, he can actually open up as a different restaurant in a week or a month.

The only possible loophole would be the type of illegal activity like drug dealing, prostitution, etc. The issues with the Dept of Labor would not forfeit the land, but worst case jsut forfeit the franchise and it's name and royalties and assistance that go along with it. Hope this helped.!

[redsquirrel]

One more thing- that's the catch 22 with a franchise. Although you have to pay yearly royalties, the advantage of being a franchise is the huge conglomeration of a company to help you out with their big time lawyers and deep pockets.

In essence, the most that could happen would be they would be shut down by the Dept of Labor for a bit, but because they are a franchise, would have the financial backing to close and reopen once they have satisfied their violation w/ Dept of Labor. Probably be on probation, but that is about as far as I see it going.

[Doom]

Lemme break it down a bit more for you, its not a massive franchise, its descent but nothing to where they have mega attorneys that would eat me alive, the owners of the original store are complete assholes and I doubt in anyway shape size or form would back these two meatheads, if they were in anyway violating any laws, and would disgrace what they have built.

In a nut shell, they caught wind of a surprise inspection, someone blew the whitsle that they were being discriminatory towards employees...we have almost 30 staff members, all off the books, only 8 or 9 are on the books, that being the minimal legal amount needed to run a restauarnt properly. The inspector came in, and looked everythuing over, they wiped out hard drives, back pay files, anything you could think of, stating that they did 75% of the work themselves, denied having illegal aliens on the premesis during working hrs as employees, and doctored their wages, to the point its sad and funny in the same shot.

These "kids" had been working there for months, some over a yr, and they hand picked those who would paly ball, and made them select a date that they would remember as their date of hire, and then fixed the books to look as though they have been paying them legally and not under the table


christ Im going cross eyed from this....

[Irishgirl]

pucknutz just passed the bar! I offer you his services lol

[redsquirrel]

Well, technically it's not completely illegal, unfortunately. In my line of work,I had experience with this. This "resident" alien...yeah right... was told by his employer that he should workfor cash w/o benefits, it would mean more $$ for him to take home to his family. Well, that would be all fine and dandy if they would have told him that he had no coverage under workman's comp, etc.. Funny he worked for a restaurant..

Now, when I need some sort of income to verify, I can't get it because the restaurant sure as shit won't acknowledge he worked there. Ultimately, it's not illegal to wrok for cash under the table. It only becomes illegal if the worker doesn't report income; which most don't.

In regards to the franchise,..whether it's big or small, they still have some sort of operations department somewhere that is responsible for upkeep and hiring of the franchises and the employees. So, what I'm saying is theywould still have franchise benefits. And part of the benefits of opening a franchise is you have a larger company to help you out in a jam. It could be financial, operational, whatever. That's part of teh agreement. Just because they are dirtbags, the franchise still agreed with the proprietor to back him financially and in return he brands the franchise name.

It's part of the existent or non-existent employee's responsibility to either say yes I'll lie, or not. If they lie, they are almost as responsible as the business owner.

If you have the balls, and have a valid case, I would take it to the powers that be. But keep in mind, business owners are shrewd and savvy. And they will do almost anything to turn a profit and not tarnish their good name. It oculd go both ways. If they owners want to run an honest business, they will do what needs to be done. If they don't care, and think they can sweep it under the carpet, they will in order to save the pennies.

[Doom]

I'll just settle for Im fucked, ride it out, and have them eventually buy me out

:mad:

[redsquirrel]

I hate to be the bearer of bad news...but I hoped it at least saved you some attorney fees.....

[Doom]

I really do appreciate the info, I was figuring as such, but just wanted to see if anyone with real in depth buisness know how, had any clue

hopefully they'll wont fuck up our forth coming project and I can just collect on my percantage of the shares...and leave when Ive made enough off them

[pucknutz78]

Originally posted by Irishgirl
pucknutz just passed the bar! I offer you his services lol

haha, i aint gonna even try to touch this one, i dont know jack shit about franchises.

[trip]

Originally posted by Doom
I really do appreciate the info, I was figuring as such, but just wanted to see if anyone with real in depth buisness know how, had any clue

hopefully they'll wont fuck up our forth coming project and I can just collect on my percantage of the shares...and leave when Ive made enough off them

IMHO you have correct approach.

Not knowing everything, bottom line seems to be people without integrity, which means ongoing problems, almost always.

Thing to key in on, is they are trying to do lot's of things right, they are open everyday for business and ringing the register, and really have the intent to make it a success.

Tough part is when there is no standard of integrity things can go boom quickly. And when that happens people like this tend to continue to act without integrity, meaning all me first and lie as much as possible to avoid everything and take what they can get. So, this becomes the big fear.

Best you can do is try and help them do better, as much as it is a pain, better to be on inside trying to help them outside complaining creating problems for them, this is how they will see it.

And then the hope is over time a good things will happen and an exit strategy will come that is good for all.

Hate these things, been there before, it is emotionally a big pain and a huge distraction. Just do your best.

Hoped That Helped
Good Luck