If a franchisor sends a franchisee a check by accident, does the franchisee have to return it?
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If a franchisor sends a franchisee a check by accident, does the franchisee have to return it?
I believe I was entitled to receive a 10k check for completing a remodel although not exactly to specs. My franchisor launched a program that offered a grant to franchisees who remodeled. I was forced to remodel at a specific time prior to remodel requirements being set. The grant states it will refund franchisees who have completed a remodel prior to the grant being offered. However, my remodel was not specifically designed to the decor package that is now mandatory because those requirements were still being worked out during my
required remodel deadline. Long story short, I will end paying more than everyone else because of my
mandated remodel date. Basically, I’ll have to remodel twice. They sent me the check by accident as I signed up for the remodel grant to see if I qualified. Do I need to return the funds?
Asked on September 23, 2019 under Business Law, Texas
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
The law disfavors "unjust enrichment" which is what this would be. Basically, someone cannot benefit from another's mistake. Accordingly, you will need to return the check.
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
Yes, you have to return the check, unfortunately. The law is very clear that a mistake does not entitle you to keep money to which you are not otherwise entitled. Just as if you had accidentally paid your credit card bill twice, they'd have to return (or at least credit vs. your next month) the extra money and could not simply keep your overpayment, so, too, if you are sent money which you are not otherwise entitled to, you must return it.
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