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If you like to follow the rules, owning your own franchise may be just the thing for you
Despite earnings last year of $250,000 and expected profit this year of $600,000, Adam Kidan filed for bankruptcy protection against creditors in U.S. Bankruptcy Court last April for his Laurel-based Dial-A-Mattress franchise.
Kidan instigated the proceedings, he said, to protect his business from his franchiser, fearing the New York-based franchise company was trying to declare his firm insolvent and activate a clause in the franchise contract that would allow it to take back his business.
It's the latest maneuver by Kidan, former corporate counsel for the parent company in 1992 and 1993. Last year, he filed a 29-count lawsuit charging the franchiser with fraud, unfair competitive practices and breach of contract. The suit also charged the franchiser was trying to put Kidan's then-3-year-old franchise out of business.
Kidan's situation is more the exception than the rule among franchisees, but industry experts caution that such conflicts are becoming more common as the franchise industry takes the nation by storm. …