Franchisor helps a franchisee to buy a large real estate to run the franchised business. Unrealistic projections were given and the business cannot carry the financial load. The loan is guaranteed by SBA. The business fails, bank gets the money from SBA - the bank owner or the Franchise owner buys the real estate from bankruptcy court at a heavy discount with different corporation names.
Is this not conflict of interest? The franchisor makes a killing - more than $500K in the initial sale (have actual build cost) and then gets back the property at a much less price than market. I find this is what is happening with my franchised center. Where can I get references to actual legal cases? What can I do to stop this steady march to the financial collapse knowing that I was given this business to temporarily run it and give some legitimacy to get money from SBA to the franchisor/bank?
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