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Washington DC Franchise Attorneys

The “Go-To Guy” For Hardball Franchise Litigation.

– Multi-Unit Franchisee Owner ($3 Million case)

Inner Workings of Franchise Law

The “Go-To Guy” For Hardball Franchise Litigation.

– Multi-Unit Franchisee Owner ($3 Million case)

Franchisee Lawyer Looking Out Window

The “Go-To Guy” For Hardball Franchise Litigation.

– Multi-Unit Franchisee Owner ($3 Million case)

Planning your new franchise

The “Go-To Guy” For Hardball Franchise Litigation.

– Multi-Unit Franchisee Owner ($3 Million case)

Businesswoman opening a franchise

The “Go-To Guy” For Hardball Franchise Litigation.

– Multi-Unit Franchisee Owner ($3 Million case)

Nationally Recognized Franchise, Antitrust, and Commercial Contracts Trial Lawyers

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Testimonials

"Jeff, I am amazed that you were able to get the liquidated damages down that low, which allowed us to avoid bankruptcy. Until we retained you we had been dealing with hotel consultants who appeared to make little head-way in lowering the liquidated damages."

Multi-Unit Hotel Franchisee, Economy Segment
(value over $3 Million)

Get Legal Assistance from Franchise Lawyers Who Defend the Franchisee

The Goldstein Law Firm is a boutique national law firm that represents exclusively franchisees and dealers, not franchisors, suppliers or manufacturers. There are only a handful of franchisee lawyer specialists remaining in the country, as most have begun representing both franchisors and franchisees.

Franchise law is a multifaceted area of law that requires specialization. Any franchise attorney can tell you about a variety of cases where franchise agreements have gone south.

Here at Goldstein, our attorneys have as much as 30 years of experience handling all aspects of franchise litigation throughout the county.

We also specialize in franchise agreement assistance, bringing you the latest developments in franchise and distribution law. With the publishing of our Franchise Trends newsletter, we can help franchisees stay updated on developments concerning different legal aspects of franchising.

Dealing with the complexities and challenges of franchise law requires focus and specialization, which is why we represent dealers and franchisees exclusively. Unlike other firms, we at Goldstein are on the side of the franchisee. We can help you decipher the fine print of your franchise agreement and single out details your franchisor may not want you to know.

Without a knowledgeable and competent franchise consultant, you may be vulnerable to the pitfalls of franchise law. Simply walking away is not a viable solution if you’re looking to protect your assets and yourself from financially damaging consequences. For those who have already signed an agreement and are struggling with franchisor difficulties, our franchise law firm also provides legal assistance through its franchise attorneys.

Frequently Asked Questions on Franchise Law:

Do franchisors have an obligation to their franchisees to act competently?

In theory, it’s possible that a franchise attorney could prove that a franchisor violated a franchise agreement by poorly managing the franchise system. Inadequately capitalizing the franchise system or poorly managing advertising campaigns could potentially violate a franchise agreement.

However, there are few if any recent case findings in which a franchisor has violated the terms of a franchise agreement. And if the franchise agreement hasn’t been violated, the courts almost never support a free-standing claim of negligence against the franchisor.

In other words, courts have held that franchisors do not owe a duty of competence to their franchisees.

It’s interesting to note, however, that many franchise law firms stay busy addressing the flip side of this issue–whether the franchisee has acted negligently in operating his or her franchise

Do franchisors have a duty to provide support to their franchisees?

On paper franchisors have this duty to some degree. Most franchise agreements explicitly set forth the respective duties owed by both the franchisors and franchisees.

However, the provisions outlining those duties owed by franchisors are few and normally too ambiguous to enforce. Most franchise agreements include contractual language stating to the effect that “the franchisor doesn’t guarantee the success of the franchisee.”

In practice, this means that franchisors really don’t have a compelling duty to provide support to their franchisees.

Also, most franchise agreements require franchisees to state in their agreements that their business venture involves risks, one of the most prominent being the business knowledge of the franchisee.

This results in a double standard: The franchisor has only a few ephemeral obligations to the franchisor. But in contrast, the “whereas” provisions in the introduction of most franchise agreements indicate that the franchisor is the undisputed guru in operating franchises in that particular industry.

What are some of the most common duties imposed on franchisors under franchise agreements?

It’s important to recognize that these duties are incredibly limited in scope. That said, they include, among other things: (1) locating appropriate sites for stores, (2) managerial assistance, (3) advertising assistance, (4) providing operating manuals, (5) training, and (6) identifying third party vendors from whom necessary products and services may be sourced.

Keep in mind, these areas are so broadly defined that even the best trial attorney would have difficulty in trying to identify – never mind proving – the contours of such duties unless he or she had extensive experience within a franchise law firm.

Are franchisors permitted to modify their requirements or system standards during the term of the franchise?

Believe it or not, they usually can make these changes. Almost all courts confronted with this question have readily permitted franchisors to change the obligations owed to their franchisees during the term of the franchise.

Franchisors gain this fluidity by lacing their franchise agreements with language that “the franchisor is permitted to modify or change the Operations Manual.” They can then “incorporate by reference” the Operations Manual into the franchise agreement.

The franchisor’s unbridled discretion is further bolstered by language in the franchise agreement that “the franchisor may modify the Operations Manual in its ‘sole discretion.'”

Everybody knows that people and businesses are subject to liability for “negligence.” Can't franchisors be held liable for negligence to their franchisees as well?

The short answer is no, not under the common law of almost every state.

When the franchisee is only claiming economic loss – which is almost always the case -the franchisee must seek its damages through a breach of contract action.

The franchisee would have to prove that the franchisor violated the franchise agreement. This is very difficult to prove, as the franchisor’s duties are usually few, ephemeral, and deliberately vague.

It’s possible a franchisor could be found liable if he or she failed to work in good faith and with fair dealing, but this is a long shot.

Note, however, that courts have found franchisors liable for negligence in certain
cases where personal injuries were involved.

Read more FAQs

Recent Litigation Issues on Franchising, Distribution and Antitrust Law

Tea Franchise Termination Found to be in Bad Faith

June 27, 2017

The High Court in Kuala Lumpur, in refusing to prohibit a former franchisee from operating independently after a termination, caused more damage to the Franchisor (Chatime Fusion Tea House) than a horde of Helopeltes. The Judge ruled that the Franchisor’s termination was in bad faith and that an injunction preventing the Franchisee from operating would “cause great injustice.” The Franchisee in the case was so angry that he filed a police report regarding the termination.  Too funny. The Goldstein Law Firm has recently been successful in seven straight injunctive cases even though these types of emergency actions are the most difficult to win for franchisees.  http://www.freemalaysiatoday.com/category/nation/2017/05/29/court-dismisses-chatimes-bid-for-injunction-against-ex-franchise-holder/      


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Jeffrey M. Goldstein Named Among Esteemed Lawyers of America®

June 26, 2017

The Goldstein Law Firm is pleased to announce that founding attorney Jeffrey M. Goldstein has been named among the Esteemed Lawyers of America®. This is the third time this year Mr. Goldstein and the firm have been awarded for their achievements and client service, following the firm’s recognition as Best Franchise Disputes Law Firm 2017 – USA by Acquisition International and Franchise Law Firm of the Year in the 2017 Finance Monthly Law Awards. Esteemed Lawyers of America® (ELOA) is an organization whose mission is, “to recognize the most respected lawyers in the country.” It seeks to help individuals and businesses find quality legal representation by offering a list of attorneys who are both (i) recommended by their peers, and (ii) qualified for recognition based upon their experience, commitment to client service and ethical standards. As described by the organization: “ELOA was established to honor those attorneys who are the most respected and esteemed by their peers throughout the legal community, and to help consumers identify them. . . . The best attorneys are being replaced by better marketers[,] and consumers don’t often know who the finest lawyers are anymore. By identifying the top lawyers as determined by the people who know them best – other lawyers – and educating the public as to who they are, Esteemed Lawyers of America® aims to change that.” Selection Criteria for Esteemed Lawyers of America® Membership in Esteemed Lawyers of America® is conditioned upon successful completion of a two-stage application process. The first […]


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Beer Brewer’s Wrongful Termination of Dealer Turns Out to be Grist for the Mill for Beer Distributor

June 12, 2017

Beer Brewer’s Wrongful Termination of Dealer Turns Out to be Grist for the Mill for Beer Distributor By: Jeffrey M. Goldstein The U.S. District Court for the Western District of Washington recently ruled that a terminated beer franchisee could sue the beer manufacturer for non-statutory damages caused by the franchisor’s termination of the distribution contract without cause. Odom Corp. v. Pabst Brewing Co., No. C17-5279-RBL, 2017 U.S. Dist. LEXIS 81348 (W.D. Wash. May 26, 2017). As the Court phrased the issue: “This case concerns whether, when a beer supplier terminates its distributor’s contract without cause, Washington’s Wholesale Distributors and Suppliers of Spirits or Malt Beverages Act, chapter 19.126 RCW, provides the distributor with a single remedy: ‘compensation from the successor distributor for the laid-in cost of inventory and for the fair market value of the terminated distribution rights.’” The case is interesting for four reasons. First, even though almost every state has beer distribution relationship legislation, there is a dearth of reported decisions regarding beer franchise terminations; this is primarily because almost all replacements of beer distributors are negotiated and include the payment of agreed-upon fair market value. Second, Pabst’s defenses in the case were not traditional ‘good cause’ arguments usually asserted to justify a termination; instead, the beer franchisor embraced a troika of somewhat absurd schoolyard bully arguments, to wit: the rules in the statute (enacted to prevent unjust terminations by brewers) don’t apply to me (even though I’m a brewer); the rules in the beer franchisor act allow terminations […]


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Goldstein Law Firm Honored as Law Awards 2017’s Franchise Law Firm of the Year

May 19, 2017

We are proud to announce that the Goldstein Law Firm was recently named “Franchise Law Firm of the Year” in the 2017 edition of Finance Monthly’s Law Awards. According to a press release from Finance Monthly announcing this year’s award winners: “Every year[,] the Finance Monthly Law Awards recognise and celebrate law firms and legal professionals from all over the world who, over the past twelve months, have consistently excelled in all aspects of their work and set new standards of client service.” The nomination and review process for Finance Monthly’s Law Awards involves months of work by a “diligent research team and dedicated judging panel,” who are tasked with producing a list of winners that represents, “some of the most successful and trusted legal professionals and law firms from across the globe.” “[A] franchise law firm dedicated to you, the franchisee.” Law firms honored as recipients of the Law Awards are featured in a special edition of Finance Monthly. In announcing the Goldstein Law Firm as Franchise Law Firm of the Year, the Law Awards 2017 describe our firm as, “a franchise law firm dedicated to you, the franchisee.” Unlike other franchise law firms that represent both franchisees and franchisors (and which, in reality, predominantly represent franchisors), the Goldstein Law Firm is exclusively dedicated to representing the interests of active and prospective franchise owners. Another factor distinguishing the Goldstein Law Firm from other franchise law firms is our representation in both transactional and dispute-resolution matters. Founding attorney Jeffrey M. […]


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Goldstein Prevails on MTD in Case Against Bathtub Manufacturer Franchisor

May 15, 2017

GLF Prevails on MTD in Case Against Bathtub Manufacturer Franchisor The definition of franchise is not always clear, as this case shows. A marketer/seller/installer of walk-in bathtubs in the New York and New Jersey area could qualify as a franchise with standing to assert counterclaims against Safe Step Walk In Tub Co. (Safe Step) under the franchising laws of those states and Connecticut and Rhode Island, the federal district court in New York City has ruled. Therefore, a motion by Safe Step for dismissal of these counterclaims was denied. Safe Step alleged that agreements between the parties constituted franchises under the Connecticut Franchise Act, New Jersey Franchise Practices Act, New York Franchise Act, and Rhode Island Franchise Investment Act. Given the basis of the allegations and the plain terms of the agreements, it was easy to find that the parties’ relationship could plausibly constitute a franchisor-franchisee relationship under the FTC Rule, the court noted. The FTC Rule had three main prongs in its definition of a franchise: (1) the use of the franchisor’s marks; (2) the franchisor’s provision of marketing assistance or control over the franchisee’s operations; and (3) the franchisor’s collection of a franchise fee as a condition of the franchisee’s commencing operation. Here, the first prong of the FTC Rule was undoubtedly met at because the installer distributes goods that are identified or associated with Safe Step’s trademarks. The second prong was also met, since the alleged involvement by Safe Step in the installer’s business operations could amount […]


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Recent Blogs on Franchise, Dealership and Antitrust Law

Tea Franchise Termination Found to be in Bad Faith

Jun 27, 2017

The High Court in Kuala Lumpur, in refusing to prohibit a former franchisee...


Read More

Jeffrey M. Goldstein Named Among Esteemed Lawyers of America®

Jun 26, 2017

The Goldstein Law Firm is pleased to announce that founding attorney...


Read More

Goldstein Law Firm Honored as Law Awards 2017’s Franchise Law Firm of the Year

May 19, 2017

We are proud to announce that the Goldstein Law Firm was recently named...


Read More

Goldstein Prevails on MTD in Case Against Bathtub Manufacturer Franchisor

May 15, 2017

GLF Prevails on MTD in Case Against Bathtub Manufacturer Franchisor The...


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Solutions franchise blog image

Reformist Thoughts on Franchise, Dealership, Distribution and Antitrust Law

Seattle Hempfest and Las Vegas Hemp Festival End Franchise Agreement

February 27, 2017

It appears that no post-termination restrictions on smoking pot will be imposed on terminated former licensee. It would have been interesting to see how a court might have applied the doctrine of unclean hands in any injunctive action. What is also notable in this dispute is that the business...


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Franchise Lawyer, Jeff Goldstein, of Goldstein Law Firm

Choosing a Franchise Law Firm to Represent You

My Franchise Agreement is Expiring, Now What? (Part I of II)

Contact Us

Goldstein Law Firm, PLLC

1629 K St. NW, Suite 300,
Washington, DC 20006

Phone: 202-293-3947
Fax: 202-315-2514

Free Consultation

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