contact an attorney
Many times franchisee consultants or brokers are concerned to recommend that their candidates have an attorney review of the franchise documents. I would strongly recommend otherwise. An attorney review not only is critical to a prospective franchisee, but it is also very important to protect the consultant or broker.
By recommending that a candidate have the franchise documents reviewed by an experienced franchisee attorney like me or my firm, a franchise consultant or broker is protecting him or herself from potential liability if the franchise he or she recommended is not successful or otherwise does not work out for the franchisee. By just sending an introductory email introducing me to the candidate, the franchisee consultant or broker has avoided being the last person to "touch" the franchise that the candidate or prospective franchisee considers. This means that a disgruntled franchisee will not blame the consultant or broker, or if he or she does, then the consultant or broker can always say that he/she recommended that the candidate retain an attorney. Read more »
Buying an existing franchise has some key advantages over buying an existing main street business. Like all business decisions, the short term and long term goals of the purchaser should determine the right fit for a business to buy. If the buyer’s goal is lifestyle, control (compared to a job) and predictable cash flow than a franchise has some distinct advantages. However, there are also some hidden cost and considerations that are unique to franchise transfers. Read more »
The National Labor Relations Board (NLRB) Office of General Counsel authorized complaints filed by employees of McDonalds franchisees could also be held against McDonalds USA, LLC, the franchisor. This has tremendous significance for all franchisors and could have far reaching consequences in the future for franchisors nationwide. NLRB held that McDonalds corporate is a "joint employer" with its franchisees. If this decision stands up, franchisors, and McDonalds in particular, may be held liable for all the infractions of its franchisees, possibly extending to joint liability for other types of actions by its franchisees.
McDonalds and the International Franchise Association (IFA) plan to appeal any rulings from the NLRB that enforce this posture. Clearly, if pursued, this ruling will open the door for many types of decisions against a franchisor for the actions of its franchisees. Read more »
Nancy Lanard was selected to be interviewed on the Blog Talk Radio program "Franchise Focus" by Rick Bisio on the topic of what someone should look for in a Franchise Disclosure Document (FDD). Nancy Lanard's interview (given in two parts) covered such topics as what is the Franchise Disclosure Document, why is it important to review it, what does each of the items to the Franchise Disclosure Document cover and each of their importance. Nancy Lanard's radio interviews shed important light on each item of the Franchise Disclosure Document/FDD and are a must listen for any prospective franchisee. Read more »
Pennsylvania HB 1620, known as the “Responsible Franchise Practices Bill”, attempts to bring a balance to the franchisor/franchisee relationship for Pennsylvania franchisees. Pennsylvania, a state that currently does not have a franchise law, has a proposed bill that will have a tremendous impact on the franchise community. The bill attempts to make franchise agreements more equitable and fair.
The stated purpose of the bill is to guaranty fairness in the franchisee/franchisor relationship and eliminate "arbitrariness, coercion, and duress." The bill poses limitations on a franchisor’s rights to terminate a franchise agreement and the reasons a franchisor may terminate the agreement. The proposed legislation also poses limitations on a franchisor's right not to renew a franchise agreement. Additionally the bill restricts a franchisor's ability to contractually limit a franchisee’s rights to transfer the franchise, among others. Read more »