With very few attorneys focusing their practice on franchise law, chances are that there is not an experienced franchise lawyer in your local area. So, if you need an attorney to review a Franchise Disclosure Document (FDD) and franchise agreement or represent you in a franchise-related dispute, should you choose a local business lawyer, or is it better to hire an attorney who is farther away but who focuses his or her practice on franchise-related matters?
While seeking legal representation locally will be your best option in many cases, hiring an attorney for franchise-related legal issues is a notable exception to this general rule. The reason for this is simple: The world of franchising is unique, and understanding the legal issues – as well as their real-world implications – requires extensive experience dealing exclusively with franchise law matters. An attorney who does not practice franchise law may be able to advise you regarding the risks of certain contract provisions and your options regarding arbitration or litigation generally, but he or she will not be able to put these issues into context, and he or she is unlikely to be familiar with the complex federal regulations and the web of state-specific franchise laws that apply.
5 Reasons Why Prospective and Active Franchisees Should Hire an Experienced Franchise Lawyer
When it comes to understanding the legal implications of being a franchisee, there are countless examples of issues that require thorough knowledge of franchise-specific legal issues. Some examples include:
- Comparing the Benefits (and Risks) of Different Franchise Systems – An experienced franchise lawyer will be able to assess your chosen franchise opportunity (or the potential risks of arbitration or litigation against your franchisor) in light of past experience involving similar franchise systems, if not the same franchise system.
- Understanding the Risks of Liquidated Damages and Mandatory Arbitration – Although liquidated damages and mandatory arbitration provisions are often written as “neutral” franchise agreement terms, they almost universally work solely to the benefit of the franchisor.
- Understanding the Implications of Conditions on Transfer and Renewal – Similarly, while the transfer and renewal conditions in your franchise agreement may appear to be straightforward, the reality is that franchisees will often need to attempt to negotiate in order to protect their investments.
- Comparing FDDs and Franchise Agreements to State Franchise Laws – In certain circumstances, state franchise laws may outlaw or override franchisor-friendly terms in a franchise agreement.
- Evaluating Options for Termination and Dispute Resolution – Part of making a smart franchise investment is making sure you have a reasonable way out. Like most other provisions, franchise agreement termination and dispute resolution provisions tend to be extremely one-sided, and you need a lawyer who can help protect your investment as much as possible.
Seeking Local Counsel for Franchise Litigation
In the case of a franchise-related legal dispute, it may be necessary to hire a local attorney, and local counsel will be able to help make sure that you comply with the local rules of court. However, since the substantive issues involved in your case will still be focused on your franchise, you will want to work with an experienced franchise lawyer for the majority of your case. If you need to go to court, your franchise attorney will be able to engage local counsel on your behalf.
Schedule a Free Consultation with a National Franchise Lawyer
The Goldstein Law Firm is a national franchise law firm that exclusively represents franchisees and dealers. If you are considering a franchise opportunity, facing a dispute with your franchisor or have questions about any other franchise-related legal issue, you can call (202) 293-3947 or contact us online for a free consultation.
