Unfair and Deceptive Acts and Practices: 10.3.6 Liability of Franchisors
Consumers may find franchisees to be insolvent, with the franchisor being the deep pocket. Liability has been asserted where the franchisor failed to terminate a financially troubled franchisee which later went out of business without honoring consumer contracts, particularly where franchisor advertising implied financial solvency of its franchisees.112