Franchise Practice Areas

The Franchise Disclosure Document Review

The purchase of a franchise is usually among the most significant investments of a prospective franchisee’s lifetime. Our firm has reviewed thousands of franchise offerings and proposed franchise agreements. We can demystify the franchise agreement legalese and answer your questions. We strongly recommend that you hire competent and experienced franchise counsel to advise you regarding this crucial decision and substantial investment.

Franchise Agreement Negotiations

Our firm can collaboratively determine key franchise agreement provisions of concern for you. We can recommend and negotiate for changed terms with your franchisor. Not only has our firm negotiated most types of franchise agreement provisions in many franchise systems, we have written numerous articles about standard franchise agreements. We represent negotiate on behalf of individual prospective franchisees and also franchisee groups or associations.

Franchisee Associations and Groups

Many franchisee issues may be addressed through a franchisee association. Franchisees can present a united front to franchisors, and California law protects the right of franchisee to associate. The firm advises franchisee groups and associations and represents them in negotiations and litigation with franchisors and their legal counsel.

Business Formation, Buy-Sell Agreements

As part of starting the new business, prospective franchises should strongly consider forming a corporation or an LLC. Such a business entity ordinarily allows for limited liability for its shareholders absent personal guarantees. Our firm often incorporates businesses, prepares initial bylaws and guides clients through the other formation steps for a flat fee. Our firm also drafts or reviews buy-sell agreements for the purchase and sale of franchise businesses.

Franchise Litigation and Arbitration

The firm has litigated hundreds of cases for franchisees in courtroom, arbitration and mediation forums. Client objectives are identified and considered, and when appropriate negotiations are undertaken. But if negotiations fail to lead to an acceptable result, our firm is willing and able to proceed to litigation and trial due to our experience. Peter Lagarias is nationally recognized as a trial lawyer for franchisees; he has been repeatedly recommended by his peers and recognized as a Legal Eagle by the prestigious Franchise Times.

Franchise Terminations and Renewals

If your purchase agreement is terminated or not renewed, you may have claims as well as liabilities. Actions for wrongful termination, or conversely actions seeking termination, require careful analysis of your rights and duties. You should contact experienced franchise counsel immediately to consider further actions as well as possible claims and defenses. Our firm has consulted and represented many franchisees in termination and renewal cases.

Franchise Transfers and Sales

Sometimes problems can arise during efforts to sell franchise businesses. Often not only is franchisor permission to sell required, but a complex buy/sell agreement and a bulk sale notice may be used in the sale transaction. You may have rights if your franchisor interferes with your efforts to sell. You also may have obligations due to selling a franchise business. We have represented many franchisees regarding the sale and transfer of their franchise businesses.

Fraud and Unfair Trade Practices

Unfortunately franchisors and their salespersons sometimes make misrepresentations or omit material information in the offer and sale of franchises. Such misconduct may be actionable allowing a franchisee to rescind the franchise purchase and receive damages. But these claims are not simple to present, and are often defended by franchisor based on fine print disclaimers in their franchise agreements. There are also time limits to bringing such claims, as with all claims. If you believe you received misrepresentations or there were material omissions when you purchased your franchise, we urge you to obtain franchisee counsel at your earliest convenience.

Territorial Encroachments

One often devastating problem for franchisees is territorial encroachment, when a franchisor authorizes competition near the franchise location. Sometimes a franchisee has legal rights to challenge such conduct, but often due to unfavorable contract provisions a franchisee may need to evaluate other actions. The firm has represented many franchisee clients on territorial encroachment issues.

Pricing and Products Issues

Many franchise agreements require franchisees to purchase product and equipment from the franchisor or its specified vendors. The products may be overpriced, or inferior, or the vendor may be providing rebates or kickbacks to the franchisor rather than the franchisee. Depending on contract provisions and disclosures you may have rights and remedies. We have represented many franchisees with pricing and approved product issues.