What are the impacts of Covid-19 Outbreak in Franchise Business?

The sudden outbreak of Covid-19 has halted the operation of most of the organizations around the world. It has been predicted that one-third of the world’s economy has been devastated already. From the hospitality industry to retailers; all the businesses are facing huge losses due to the lockdown. Under this present scenario, the franchise business is also affected hugely. As a result, most of the Franchise Attorney is facing inquiries about how the franchisees can terminate their agreement to prevent upcoming loss.
It is the duty of the Franchise Attorney to assure the clients in this challenging time so that they can get the right direction. Almost all of the affected countries have been restricted to a social gathering. Businesses like barbershops, restaurants, pubs, bars, nightclubs, movie theatres, gyms, salons, and many others are facing a hard time to stay in the trade.
Different questions like ‘how long we can stay into business?’ or ‘will I have to pay rent during this time?’ are popping up on the mind of the franchisees. They are also eager to know whether they have any clause in the lease that will help them to terminate the agreement without making any further financial loss.
Under certain circumstances that are known as force majeure that implies unforeseeable ‘acts of God’; the franchisees may find themselves unable to meet some obligations from the contracts. They can seek the legal assistance of the attorney to check whether they can imply force majeure or any other common law of the impossibility that can perform as the excuse of the contractual obligation.
It has been predicted that the force majeure can be seen as the legal solution in this present situation as it is quite common for the franchisees and dealers unable to meet the result of significant unforeseen events that are having a negative impact. Till now, the common instances like floods, earthquakes, strikes, hurricanes, shortage, and strike are known beyond the control of the human being. If it can be instanced as ‘Consequences out of the control of the parties’, then the franchisees may get relief for this excuse of failure.
It has been said that analytically, the term force majeure covers all the incidents like an outbreak of a disease, emergency condition to deal with a business like closure, or outbreak of people like war or riots. However, it can be also said that not all courts can consider it as the unforeseeable incident if the contract was signed after the outbreak.
Location: Washington, DC, USA

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