Video Transcription
Hi, my name’s Jeff Goldstein from the Goldstein Law Firm in Washington, D.C. We represent franchisees and dealers in complex litigation and courts throughout the country. We also do arbitrations, and mediations, and we review franchise disclosure documents, and franchise agreements. If you’re looking for a franchise lawyer, that’s probably why you’re watching this video today, I would point out to you that franchise law is a little bit different than other areas of the law in terms of finding an attorney. The lines on both sides of the franchisee, franchisor line are very polarized. There are three general groups of franchise attorneys, the first are franchisor attorneys. These are guys and gals that operate out of large corporate law firms usually with a national and international present. They charge higher rates, and again work only for franchisors. The ironic part about this is that these guys who represent only franchisors and get paid the bigger bucks on average, usually have the easiest case. The franchise agreements are changed year over year in each iteration that comes out is usually more oppressive to the franchisee or dealer, and it makes the case much easier for the franchisor attorney in court.
The next group of lawyers, potential group, is franchisee-only lawyers. There are only three of these left in the entire United States, our firm is included, and these are smaller firms that are not part of large corporate law firms. They represent only franchisees and dealers. The cases are much more difficult, the attorneys are high-quality, also able to compete with the franchisor lawyers outta the corporate law firms. And one of the distinguishing characteristics that you’ll find with franchisee-only lawyers is that they have to have a bit more gumption as well as more creativity. Each year having a look at a worse iteration of a franchise agreement that cuts out each potential loophole from the year earlier at a certain period of time, there’s very few options left in terms of legal theories. Therefore, creativity is a plus when you’re looking at franchisee-only attorneys. Over time there are some franchise attorneys that will advertise that they’re franchisee attorneys. This is not the case. They may have started out in the early 2000s as franchisee attorneys, but over time they morphed and began representing franchisors as well. And this is due to the lower of higher financial return as well as more power and bigger ego boost to some of these guys who converted to represent both sides.
In my view, there’s a problem if you’re a litigator and you’re gonna represent both franchisors and franchisees. In addition to the fact that the two sides are polarized just in terms of politically, and socially, and legally, you’ve also got the problem of making law in one jurisdiction if you practice nationally, and coming back a week later having to face your own poor precedent that you’ve set on behalf of a franchisor if you’re now representing a franchisee. Lotta lawyers ignore that, don’t agree that it exists, but it does. It’s not a traditional conflict under the rules of ethics, but it’s still there. Many times franchisor council who represent franchisees do have to pull their punches when they represent a franchisee, given that a franchisor wouldn’t look favorably if a certain type of law was set in a particular jurisdiction. That would leave our third category which is the franchise attorney that does both, franchisee and franchisor work. And as I said, a good number of attorneys fit within this particular analytical grouping. Many of ’em won’t admit it, for instance they’ll say, “Well, we are, I am a franchisee attorney, the head of a firm, but my partner down the hallway, he does franchisor work.” Okay, that’s really an inconsistent position and not really a realistic position. If you’ve got the guy down the hallway setting an issue on a merger clause or an integration clause the week before on behalf of a franchisor, it’s gonna kill your chances precipitously in that same jurisdiction, in that same court, if you’re going out representing a franchisee. A couple firms that used to be very active in the franchisee side do that and the senior porter [SP] tries to keep his name off the pleadings, although it doesn’t always work perfectly. Big firm down south, also one up in Jersey that has the same type of arrangement. So again, if you’re gonna choose an attorney and you’re a franchisee, you’re gonna wanna look for a franchisee-only attorney. It makes a difference in how hard they’re gonna fight for you litigation-wise, as well as hard how hard they’ll push for you when you’re looking for modifications on your franchise agreement.
Now in terms of what I do in my firm, The Goldstein Law Firm, we represent, as I said, only franchisees and dealers. On any given day, we can be in a court in Washington, a court in California, court in Massachusetts, Florida, anywhere in the country. This gives us a cutting-edge advantage over many of our other competitors, and it also allows us to compete against the franchisee, franchisor hybrid guy who really does not have the full heart and soul of the franchise in mind as he litigates. And that doesn’t matter whether it’s a franchisor or a franchisee on that particular day. One of our specialties at the firm deals with emergency terminations where a franchisee or a dealer has been terminated and they’re only hours, or a day or two before the termination. When the franchisor is not cooperative in terms of resending [SP] that type of termination notice, what we have to do is go to court or an arbitration and get an emergency order, a preliminary injunction or a temporary restraining order, the language depends on the particular court.
Usually your chances as a franchisee are under 15% when you have allowed things to get outta control to a point where you’re have to get a lawyer to go into court and get an extraordinary emergency motion. Our firm over the last couple of years, has batted close to 90%, way above obviously the 15% of the average chances on walking into a preliminary injunction case in a termination context. That’s one of our specialties and we work around the country with those types of terminations. In addition, we do antitrust work for franchisees that touches on tying arrangements, concerted activity, section one, section two. Many times antitrust cases are not viable. Over time they’ve been sorta rooted out by courts saying that there’s no market power for franchisors. There’s still a small sliver left for tying, and vendors, and certain supply arrangements, and we do have a great expertise in that as well. We also do RICO cases, fraud cases, common breaches of contract for franchisees, unfair acts and practices, covenants of good faith and fair dealing, which has also been the backup for many franchisees who have been terminated or treated unfairly. But over time that also as a doctrine has receded and has much less vitality. We’ve been successful on furthering some of those covenant of good faith and fair dealing cases given the number that we do and our expertise in knowing how to work the facts to show a violation of that type of covenant.
Thanks for watching today. If you have any questions, please give me a ring, 202-293-3947. Or email me at jgoldstein@goldlawgroup.com. I look forward to hearing from you.
