Is advance paid to take up the franchisee refundable..?
Avinash G
(Querist) 30 May 2014
This query is : Resolved
Dear Friends,
Recently I had paid an advance of Rs.10000/- to take up the franchise of pre-school at Mysore but soon after that I got transferred to Bangalore and at this moment I found it difficult to start the same at Bangalore and continue my work as well. So I have requested them to refund the advance but they said it cannot be done. I find its morally not correct as-
1.They no where initially either mentioned in the brochure/mail/verbally that this amount is non-refundable...
2.I had not chosen/blocked any particular area in Mysore, so that they lost any customer out of it...
3.Since its just an advance from my side, they have neither invested a single rupee on me nor my initial confirmation has caused a loss of even single rupee to them...
So I personally feel their attitude was against their business ethics and although the amount is small, I wish to fight for that if you feel I am right on this...So please give your opinion on this...?
With lots of Regards,
Avinash
Guest
(Expert) 30 May 2014
Depends upon whether that was refundable or not as per the terms of the agreement.
Kumar Doab
(Expert) 30 May 2014
Show the docs on record to your lawyer and if the T&C inserted in agreement does not entitle the advance to be non refundable then you may succeed.
Sankaranarayanan
(Expert) 30 May 2014
Normal course it depends as per the agreement Anyhow meet local lawyer and act accordingly
Avinash G
(Querist) 30 May 2014
Dear All,
Thanks for your suggestions. But the thing is there was no agreement made between us regarding this and no where they had mentioned that this amount shall not be refundable. When I had decided to take the franchise, I had transferred this advance as a token of confirmation to them which eventually I had to drop it due to my personal problems.
So will my argument could be justified to get back my money...?
Dr J C Vashista
(Expert) 31 May 2014
There is no need of asking for refund of advance money paid in the absence of any sort of agreement vis-a-vis terms and conditions for the franchise. It is their sweat will, if they may consider your request for refund, seek amicable settlement without going for any legal action/ proceeding.
Engage and consult local lawyer.
prabhakar singh
(Expert) 31 May 2014
Payment of earnest means party paying it meant business.
Even if the terms of agreements speaks of it's forfeiture,the sufferer party can not legally forfeit the entire earnest unless
the losses caused by breach is greater than the earnest received.However actual damages caused can be claimed out of that earnest.In case actual damages are greater than amount of earnest the suffering party can not claim more than the amount of earnest.
Guest
(Expert) 31 May 2014
Irrespective of whether there was a written agreement or not, the terms & conditions of the franchise would regulate the case. There must be some condition for payment of advance and the purpose for that. So, recheck that document/brochure, which might have been provided to you or the terms explained to you by the franchiser about the purpose for whcih you paid advance.
The basic question arises, whether you contacted the franchiser or not for refund and what was their response, including reason quoted by them for non-refund? You have not stated anywhere.
So, unless you give clear facts of the case and background history and their responses, you may not be able to get suitable advice.
However, if you feel the necessity of fighting the case legally, better contact some local lawyer, show him all the related documents and do as advised by him.
ajay sethi
(Expert) 31 May 2014
you will end up spending more money in legal fees if you adopt legal proceedings to recover advance of Rs 10,000
Rajendra K Goyal
(Expert) 31 May 2014
Agree with the advise of expert PS Dhingra ji.
Advocate Ravinder
(Expert) 31 May 2014
I agree with Vashista sir. Since you do not have any agreement and that too you do not have any specific clause of refund of advance amount, you have no authority to ask for return of money. Do not give any legal notice to them. Go personally and request them amicably.
T. Kalaiselvan, Advocate 
(Expert) 01 June 2014
As advised by experts, try for amicable settlement and if nothing is seen coming, you may issue a legal notice. Do you have an evidence for having given the advance amount to them?.
