If your franchise agreement is about to expire and you intend to renew, it is important to understand just how much control your franchisor has over the renewal process. One of the ways franchisors exercise this control is by requiring execution of their “then-current” franchise agreements.
In many ways, renewing a franchise is very similar to the initial franchise acquisition. You need to convince the franchisor that you are a good candidate to remain in the system, you need to invest to meet the franchisor’s system standards, and you need to negotiate the terms of a franchise agreement. Yes, in most franchise systems, in order to renew you need to sign a completely new, “then-current” franchise agreement.
Is it safe to assume that your renewal franchise agreement will contain the same terms as your original agreement? In a word, “no.” Franchisors constantly update their form agreements to address changes in the law and adopt new industry standards, and you can be sure that your franchisor is not offering any of the concessions you negotiated when you purchased your franchise.
30-Year Franchise Attorney for Franchise Agreement Negotiations
Jeffrey M. Goldstein is a national franchise lawyer who has spent the last three decades exclusively representing franchisees and dealers. As a transactional attorney and litigator, Mr. Goldstein is intimately familiar with the types of franchise agreement provisions that can spell trouble for franchisees, and he knows what works in franchise agreement negotiations. While each franchise renewal involves a unique set of circumstances, Mr. Goldstein has established a proven track record of securing important and favorable concessions for existing franchisees during the renewal process.
Important Negotiation Points for Franchise Renewals
When negotiating a renewal franchise agreement, it is important to address the same types of issues that you would address during an initial franchise agreement negotiation. From mandatory updates to transfer and renewal rights, the issues that mattered during your first franchise term will continue to matter during your second. But, there are some unique aspects to franchise renewal negotiations as well. For example:
- Changes in Material Terms – Have there been any changes to the material terms of the franchisor’s form agreement? For example, is the franchisor now offering less territorial protection or requiring mandatory purchases from a designated supplier?
- More Knowledge about the System – Now that you have been a franchisee for five or ten years (or longer), what do you know that could aid in your negotiations? Have you had experiences or heard about issues from other franchisees that you want to address in your renewal contract?
- Negotiations Outside of the Franchise Agreement – Is your franchisor threatening not to renew your franchise based upon an alleged default or failure to satisfy some other condition of renewal? In some cases, renewal negotiations will begin before you get to the renewal franchise agreement.
Contact the Goldstein Law Firm
If your franchise agreement is approaching expiration, national franchise attorney Jeffrey M. Goldstein can help you negotiate the terms of your renewal. To get started with a free, no-obligation consultation, call the Goldstein Law Firm at (202) 293-3947 or request an appointment online today.