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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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Top Attorney USA – Litigation

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Superior Attorney in Franchising

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Finance Monthly Global Award Winner Logo

Franchise Law Firm of the Year

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BBB of Washington DC

A+ Rated

Washington DC Chamber of Commerce

Verified Member

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Franchise Law Firm of the Year

ISSUU

Best Law Firm for Franchise Disputes in 2017

Law Awards Finanace Monthly

Franchise Law Firm of the Year

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

Women in Franchising: Notable Statistics on Female Franchisees

September 29, 2017

Earlier this year, Franchise Times reported the results of a study conducted by Franchise Business Review which examined the rising trend of female franchise ownership. The article highlights some interesting statistics, and it shows just how big of a role female franchisees play in current success and the projected future growth of the franchise industry. Here are some of the most noteworthy numbers from the survey: 63,000 According to Franchise Times, female franchisees earn an average income of $63,000 per year. 6,400 Franchise Business Review surveyed 6,400 female franchisees, representing only a portion of the female franchise owners operating today. 85 85 percent of female franchisees said they would recommend their brands to others considering franchise opportunities. 84 84 percent of female franchisees said that they respected their franchisors; however, only 80 percent said that they believed their franchisors acted “with a high level of integrity.” 74 According to Franchise Business Review, 74 percent of female franchisees say they would “do it again” knowing what they now know as a result of their experience in the franchise industry. 60 Sixty percent of female franchisees surveyed had a bachelor’s degree or higher. Seventeen percent held an associate’s degree, and 20 percent reported having only a high school education. 58 Just over half of female franchisees reported that their franchised businesses are meeting their financial expectations. 51 Child services is the only franchise sector in which the majority of franchise owners (51 percent) are women. Travel and hospitality has an even split […]


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When is the Right Time to Sue Your Franchisor?

September 27, 2017

When you purchased your franchise, you never expected to in up in court. You did your due diligence, you read the statistics saying that most franchisees were satisfied with their businesses, and you were confident that you could make your franchised outlet a success. If your franchise is struggling, you are not alone. Building a successful business is not easy, and many franchisees find out that their relationships with their franchisors ultimately do more harm than good. As a result, they end up looking for a way out before their franchise agreement expires, and this often means exploring their options for litigation. Franchise Dissatisfaction: When Should Franchisees Take Legal Action? Of course, even under the most contentious of circumstances, full-blown courtroom litigation is generally a means of last resort. There are more-amicable alternatives available, and these will often offer more cost-effective and mutually-beneficial opportunities for resolution. That said, the issues that spur alternative dispute resolution (ADR) methods and litigation are generally the same, and dissatisfied franchisees should take the time to gain a clear understanding of all of the options that are on the table. If you are facing a dispute with your franchisor or seeking a way to terminate your franchise, the following are some examples of some potential grounds for legal action: State and federal disclosure violations, including inaccurate or incomplete information in a Franchise Disclosure Document (FDD) Imposition of illegal price-fixing arrangements and other illegal competitive restrictions Improper refusal to renew or consent to transfer of a […]


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Thinking about Buying an Existing Franchise? Here are Four Considerations to Keep in Mind

September 22, 2017

When buying an existing franchised business, the process can involve a number of franchise and non-franchise legal issues. Here is an overview of some of the key issues to consider when evaluating a potential purchase of an existing franchise: Transfer Conditions Franchisors like control. One of the ways they exercise this control (among many, many others) is by placing conditions on franchisees’ ability to transfer their franchise rights. When communicating with your prospective seller, it will be important to gain a clear understanding of where he or she is in the process of obtaining approval for the transfer. As a prospective buyer, you will likely need to go through the franchisor’s approval process for new franchisees as well, and you should make sure you understand the requirements and timelines involved. Remaining Term and Renewal Rights All franchise agreements are time-limited. The length of time a franchisee is granted the right to operate is known as the franchise “term.” Before buying an existing franchise, you should make sure you know the amount of time remaining in the term, and you should factor this into your financial calculations. Likewise, most franchise agreements include “rights” to renew. If the seller’s franchise agreement includes a renewal provision (or if the seller is currently operating in a renewal term), you will want to make sure you have a clear understanding of your rights and obligations with regard to renewal. However, as we discuss below, you will also need to understand whether you will be required […]


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Should You Join (or Form) a Franchisee Association?

September 20, 2017

As a franchisee, it is easy to feel like you are alone on an island. When you run into issues (and particularly issues with your franchisor), knowing where to go for help can be a challenge. In some franchise systems, one option may be to join a franchisee association. While these associations were once vehemently opposed by franchisors who feared the collective ranks of their franchisees (as is still the case in some troubled franchise systems), today, many franchisors acknowledge franchisee associations, and in some cases they may even turn to these associations for information and guidance. As a result, under the right circumstances, joining a franchisee association can have benefits on numerous levels, and it may make sense for both new and more-experienced franchisees to get involved. Three Questions to Ask When Considering a Franchisee Association But, as with most things in the world of franchising, there are two sides to association involvement. So, should you join (or form) a franchisee association? Here are some initial questions to consider: Q: What type of association are you considering? There are different types of franchisee associations. There are general associations (which are most common in large franchise systems) that represent the collective interests of their members, and then there are special-purpose associations that organize in response to a particular issue with a franchisor. Since there are only limited protections for franchisee associations under state law (and no specific protections under federal law), franchisees who are considering association membership must be aware […]


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Good or Bad? A Closer Look at Some Franchise System “Benefits”

September 15, 2017

When considering franchise opportunities, it is important to understand that you are involved in a sales process. If you are a strong candidate, franchisors will want to sell you on their systems, and you will work with salespeople who get paid on commission to entice prospective franchisees to enter into franchise agreements. During this process, you will likely hear about several “benefits” that each franchise system has to offer. But, in many cases, these benefits can actually be limitations and restrictions in disguise. Let’s take a look at some examples: Benefit or Drawback: Common Selling Points for Franchise Opportunities 1. Designated Suppliers In product-based franchises and franchises that offer a mix of products and services (such as fitness gyms and cleaning franchises), it is common for franchisors to require their franchisees to make purchases from designated suppliers. There are a number of ways that this can be promoted as a benefit, from maintaining uniformity among franchisees to limiting your sourcing burdens and ensuring the quality of the products that go on your shelves. However, designated (or mandatory) supplier provisions come with drawbacks as well. For example, suppose your franchisor’s designated supplier falls behind on deliveries. Or, what if its products simply do not meet your (and your customers’) expectations? If you are contractually bound and unable to consider alternatives, these could present real problems for your franchised business. 2. Advertising Funds A system-wide advertising fund can provide significant benefits for the right franchisees in the right franchise systems. But, before […]


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Recent Blogs on Franchise, Dealership and Antitrust Law

Women in Franchising: Notable Statistics on Female Franchisees

Sep 29, 2017

Earlier this year, Franchise Times reported the results of a study...


Read More

When is the Right Time to Sue Your Franchisor?

Sep 27, 2017

When you purchased your franchise, you never expected to in up in court....


Read More

Thinking about Buying an Existing Franchise? Here are Four Considerations to Keep in Mind

Sep 22, 2017

When buying an existing franchised business, the process can involve a...


Read More

Should You Join (or Form) a Franchisee Association?

Sep 20, 2017

As a franchisee, it is easy to feel like you are alone on an island. When...


Read More
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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Esteemed Lawyers of America Logo

Esteemed Law Firm Complex Litigation

Global Law Experts Logo

Recommended Firm in Franchise Litigation

Who's Who Attorney Logo

Top Attorney USA – Litigation

Avvo Franchise Lawyer Symbol

Superior Attorney in Franchising

Avvo Franchise Lawyer Symbol

Superior Attorney in Antitrust

Finance Monthly Global Award Winner Logo

Franchise Law Firm of the Year

Lead Counsel logo

Chosen Law Firm for Commercial Litigation

BBB of Washington DC

A+ Rated

Washington DC Chamber of Commerce

Verified Member

Lawyers of Distinction logo

Franchise Law Firm of the Year

ISSUU

Best Law Firm for Franchise Disputes in 2017

Law Awards Finanace Monthly

Franchise Law Firm of the Year