Tenerife Ex-Taxi Driver Sues Real Estate Firm Over Alleged Franchise Fraud

A former taxi driver from Tenerife is suing a well-known real estate company, claiming he was defrauded when he signed up as a franchisee. He alleges the company promised him a successful business under their brand but failed to deliver on crucial support and information.

The lawsuit, filed in Barcelona, states that the real estate firm encouraged him to open an office in Adeje in 2022, even though he had no prior experience in the industry. He claims the promised training and guidance were merely a generic presentation, with no real business plan or method provided.

The franchisee also says he never received the legally required pre-contractual information, such as details about the existing franchise network or how the business was performing. He also alleges he didn't get the specialized training or technical advice needed to make the business viable, which is considered essential by Spanish law and the European Code of Ethics for Franchising.

Things worsened when he discovered the real estate company had allowed other offices to open in areas where his contract stated he had exclusive rights.

Furthermore, he accuses the company of running a secret "second business" program that let others use their brand and online tools without following the same rules as franchisees. His lawyer described this as direct competition, encouraged by the parent company, and an act of "blatant corporate bad faith."

When his franchise wasn't making money, he met with company executives in Barcelona. He says they asked him to wait a few months and promised he could close the office without penalty if it remained unprofitable. He eventually closed the office, but soon after, the franchisor sued him for breaking the contract.

Now, the Tenerife man is fighting back with a counterclaim. He wants the contract declared invalid because he claims his consent was flawed. He is also seeking €36,059 in compensation, covering his franchise fee, deposits for future franchises, and costs for external training he had to pay for himself.

His lawyer argues that the franchise failed to meet any legal obligations and is invoking a legal principle that allows a party to suspend their own obligations if the other party has already breached the contract. He is asking the court to either cancel the contract or rule that the franchise breached it, ordering them to pay damages.