If you have purchased a franchise and are having difficulties with the franchisor, we can help. We can assist you in addressing your concerns. If the franchisor misled you, we can be your advocate. Many times the franchisor will make you feel like it’s your fault that you are struggling. However, in some instances, the franchisor has given inaccurate information and has failed to meet its obligations to you.
You are not alone. We have assisted many franchisees in cases/situations against the franchisor. Please contact us (for free and with no obligation) if you have any concerns with your franchisor. Do not try to go it alone. You can bet that the franchisor has its legal team ready to beat you down.
Get an experienced franchise attorney behind you who will hold the franchisor to their obligations. We are experienced in many areas of franchise law including:
Breach of Contract
We have successfully represented numerous franchisees in legal actions against the franchisor for breaching the franchise agreement, often on a contingent basis.
Fraud, in general, is a very difficult legal action to pursue. It is even more difficult to pursue in a franchise relationship. Yet, in some franchise situations, fraud is present and worth pursuing.
The franchise disclosure document (FDD) is a legal disclosure document that must be given to individuals interested in purchase a franchise in the United States. You must receive the FDD a minimum of 14 days prior to purchasing the franchise. The Federal Trade Commission (FTC) has outlined what is to be included in the FDD in The Franchise Rule. We represent franchisees that have been injured as a result of the franchisor violating The Franchise Rule.
State Franchise Violations
In addition to The Franchise Rule, some states have additional franchise laws. We represent franchisees that have been injured as a result of the franchisor violating state franchise laws.
In almost every franchise agreement the franchisee is provided with a protected territory. We represent franchisees whose territory is being encroached on by the franchisor. This is most often done by the franchisor selling additional franchises too close to the already existing protected territory.
Failure to Renew
A franchise agreement often contains specific language on how to renew a franchise agreement. But what happens when a franchisee doesn’t realize they didn’t renew properly and their investment is harvested by the franchisor? We can help with that.
Unreasonable System-Wide Changes
This is most often pursued under a breach of contract claim. An unreasonable system-wide change can have dramatic financial consequences to the franchisees in the system. As such it is crucial to seek legal representation.
Issues Related to Supply Chain Sourcing and Pricing
Franchisors often control the supply chain, including the prices. In most circumstances, the franchisor receives a financial benefit that must be disclosed to the franchisees in the FDD. In some circumstances, the franchisor itself is the supply chain. In all of these circumstances, the franchisor makes a significant amount of money off of the required franchisee purchases. We can help when those relationships are not disclosed, improperly disclosed, or abused.
If you receive a termination notice, we can help. We have successfully negotiated the continued relationship on behalf of franchisees.
If you want to terminate, we can help. We have also successfully negotiated the early termination of the franchise relationship on behalf of franchisees.
Most franchise agreements contain a non-compete clause. The non-complete clause most often comes into play after termination. We can provide advice on how to avoid violating a non-compete and, in some cases, negotiate the release of the non-compete clause.
This should be treated just like purchasing a new franchise! Do not assume you are being given the same franchise agreement. You must understand that each renewal comes with a release of any prior claims against the franchisor. It is crucial that you hire an experience franchise attorney to review the new FDD and franchise agreement BEFORE you renew.
Franchise sales or transfers
We can help you with the sale or transfer of your franchise. We can negotiate and communicate with both the buyer and the franchisor on your behalf. We also draft the sale & transfer agreements.
Churning occurs when the franchisor sells a franchise to a franchisee, quickly terminates that franchise, then turns around and resells the franchise to another franchisee only to continue the termination and resale process. This often occurs in lower cost franchises and runs rampant in the cleaning franchise industry. We are able to expose franchise churning and help those injured by it.
Franchise agreements always contain the licensed use of a trademark or trademarks. If the franchisor accused you of violating trademark law, we can help. We can also help you if the franchisor isn’t protecting the trademark.
Franchisee associations are a powerful tool for franchisees. Individually franchisees have little to no negotiation power with the franchisor. However, when they band together, their power grows. A franchisee association helps level the playing field between franchisees and the franchisor. We help form and represent franchisee associations.
At Fortman Law, we can guide our franchise clients through all the phases of franchising, including initial investigation of a franchise opportunity, franchise ownership, and termination/exit of the franchise relationship.
Current/Former Cases & Investigations & Consultations:
The Janitorial Agency (TJA)
Bonus Building Care
Dickey’s Barbecue Pit
Instant Tax Service
Images 4 Kids
Sauce on the Side
Blo Blow Dry Bar
Oil & Vinegar
Griswold Home Care
What is a Franchise?
A franchise is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system. Franchises are commonly marketed as a “business in a box” or “be in business for yourself not by yourself.”
Franchising is about the franchisor’s brand value (its most valuable asset), the support the franchisor provides to its franchisees, and the franchisees obligations to deliver the product or services to the system’s brand standards. It is a delicate relationship.
A great franchisor will provide systems, tools, and support so that their franchisees have the ability to successfully deliver the brand’s standards and ensure customer satisfaction. A great franchisor knows that the franchisee is the local face of the company. The franchisor provides the franchisee with franchising leadership and support and exercises some controls to ensure the franchisee’s adherence to brand guidelines. While the franchisee is responsible for the day-to-day management of its independently owned business and benefits from his own performance and capabilities.
So what happens when the franchisor is not a great franchisor? You contact us and the sooner the better! We have seen numerous “bad” franchisors who don’t provide the system, support, or tools that the franchisees rely on to succeed. Yet, they continue to collect royalties. If you are struggling with your franchisor, contact us for a free consultation.