FORMATION AND OPERATION OF JOINT DEALER AND FRANCHISEE GROUPS

In the face of franchise or distribution discord, franchisees and dealers often look to form a dealer or franchisee group to confront their franchisor or supplier. Sometimes these groups take the form of larger franchisee or dealer associations, and other times they manifest themselves as smaller more informal multi-plaintiff or multi-client alliances, either in or out of court. Not only is there strength in numbers, but there also is client cost-savings arising out of joint legal representation.

Despite the potential benefits obtained by affiliating with other franchisees, there also exist potential costs to such combinations. Many lawyers instinctively recommend the formation of franchisee and dealer groups since, from the perspective of these lawyers, the larger are these groups the higher the likelihood that the lawyers’ fees will be paid. Although that is a legitimate goal, it should not be the only one pursued by franchise lawyers providing advice on group representation issues.

In this regard, it is important to determine whether the franchisor or supplier will view the specific issues raised by franchisees and dealers to be so significant and fundamental that a decision in their favor of the joint franchisees would set a lasting and public negative precedent against the franchisor in the franchise or distribution system. When this ‘no-win’ perception is embraced by a franchisor, it is very unlikely that it will be willing to entertain a settlement, formally or informally, in the face of joint action. In this situation, a group approach, rather than an individual approach, would be counterproductive.

Further, when franchisees and dealers formally come together as ‘joint plaintiffs’ in court action, they frequently are subject to the potent legal procedural objection that their claims are too dissimilar to proceed in one case jointly, and thus, according to the objection, should proceed individually, in distinct cases, where each of their unique facts can be appropriately examined and litigated. When franchisors and suppliers are successful in making this procedural objection, it forces franchisee plaintiffs to independently fund full individual litigations, thereby exponentially increasing the expected costs of litigation for each individual potential franchisee plaintiff.

Experienced franchisee lawyers like Jeff Goldstein and attorneys at the Goldstein Law Firm are able to realistically and accurately identify and tease out the common elements of joint franchisee and dealer claims. Over thirty years of experience in litigating and negotiating claims on behalf of joint franchisee and dealer groups across hundreds of franchise and distribution systems allows the Goldstein Law Firm to provide you with a suitable battle plan before you expend considerable resources rallying the troops into formal or informal groups, which, at the end of the day, is not always the best answer to every franchise problem.

SUCCESS OF GOLDSTEIN LAW FIRM  IN REPRESENTING FRANCHISEES AND DEALERS IN FORMING AND OPERATING INFORMAL DEALER AND FRANCHISE GROUPS

Jeff Goldstein and the lawyers at the Goldstein Law Firm have utilized their over thirty years’ of franchise and distribution expertise and experience to form and guide groups of franchisees and dealers around the country. Goldstein Law attorneys have successfully negotiated and litigated on behalf of numerous groups of franchisees concerning almost every franchise and distribution issue imaginable, including: computer programs, suppliers, remodeling, advertising, cooperatives, product pricing, menu modifications, exclusive territories, performance standards, and rights of first refusal. Jeff Goldstein has successfully represented groups of franchisee plaintiffs in multi-party litigation in courts and mediations throughout the country.

WHAT TO DO IF YOU WOULD LIKE TO FIND OUT WHETHER IT WOULD BE BENEFICIAL TO FORM JOINT PLAINTIFF OR MEDIATION GROUPS IN YOUR FRANCHISE OR DISTRIBUTION SYSTEM

The Goldstein Law Firm’s attorneys believe that when a franchise or dealer dispute arises it is important to determine definitively at the inception of the dispute whether the client would be best represented by joining with other franchisees that have been similarly negatively impacted by the franchisor’s wrongful conduct, or by circling the wagons and fighting one-on-one alone against the franchisor. Jeff Goldstein, with over three decades of personal complex litigation experience, is uniquely qualified to help you make this complex, counterintuitive and esoteric determination regarding joint representation.

If you believe that your franchise or distribution system could benefit from increased protection through joint franchisee and dealer rights, you should contact Jeff Goldstein at the Goldstein Law Firm at 202-293-3947 to explore the idea of forming joint litigation or mediation groups to battle your franchisor or supplier.

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Goldstein Law Firm, PLLC

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

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

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