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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

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

Top Franchise Litigator for Franchisees and Dealers

Top Franchise Litigator for Franchisees and Dealers

2017 Finance Monthly Award

2017 Finance Monthly Award

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

Trends in Franchising: What Franchisees Can Expect in 2018

January 25, 2018

As a franchisee, finding success means meeting customers’ demands while working within the confines of a franchisor’s business system. As market conditions change and new technologies emerge, franchisees can struggle when their franchisors fail to keep pace with the times, and they can incur unnecessary financial burdens when their franchisors choose to follow the wrong path. The following are five trends that are likely to impact franchisees – for better or for worse – during 2018. 5 National Trends (With Legal Implications) Likely to Impact Franchisees in 2018 1. Proprietary Apps and Online Ordering Certain franchised brands have emerged as leaders in the trend toward proprietary apps and online ordering. Several quick service and casual dining restaurants now offer tableside tablets for ordering food, and restaurants are increasingly encouraging customers to order online for instore pickup. When used effectively, these tools can streamline the customer experience and make it easier for franchisees’ employees to keep pace during periods of high demand. However, without thorough testing and a clear plan for implementation, they can confuse and frustrate customers, and they may be destined to become relics of the past. 2. Facial Recognition and Alternative Payment Options While alternative payment options – such as Apple Pay and PayPal – have been making online shopping easier for years, many brick-and-mortar concepts are just starting to incorporate these options into their point-of-sale systems. If your franchisor wants to offer alternative payment options (including use of facial recognition) in test locations or across the entire […]


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What Do Prospective Franchisees Need to Know About SBA Loans?

January 23, 2018

As a prospective franchisee, you have a handful of options when it comes to ways to finance your franchise. One of these options is a bank loan guaranteed by the U.S. Small Business Administration (SBA), which is commonly referred to as an “SBA loan.” While obtaining an SBA loan can help mitigate your financial risk as a franchisee, before you apply for funding, it is important to understand the terms, conditions and residual risks that these loans entail. If you are considering an SBA loan to finance your franchise, here is a brief introduction to what you need to know: 5 Important Facts about SBA Loans for Franchisees 1. An SBA Loan is Not Actually a Loan from the SBA. As we mentioned above, an SBA loan is not actually a loan from the U.S. Small Business Administration, but rather a loan from a private bank that works with the SBA. When you obtain an SBA loan, the SBA guarantees a portion of the loan, which means that the SBA will pay the bank if you are unable to do so. 2. The SBA Does Not Fully-Guarantee Franchise Loans. While the SBA will guarantee a significant portion of your loan, it will not guarantee your entirely. Depending on the amount you borrow, you may still need to personally guarantee 15 to 25 percent of the loan for your franchise. You will also need to make a down payment, and you may need to pledge assets as collateral. 3. In Order […]


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Trust But Verify: 7 Resources for Finding Information About Your Franchisor

January 18, 2018

When you buy a franchise, your decision to move forward is largely based upon information provided by the franchisor. From marketing materials and sales pitches to the Franchise Disclosure Document (FDD) and franchise agreement, while you may receive information in multiple formats, all of these formats trace back to the same single source. Hopefully, the information you receive is up-to-date and not misleading. Hopefully, your franchisor is confident in its offering and wants you to make as informed of a decision as possible. Unfortunately, this is not always the case. As a result, it is important for both prospective and current franchisees to seek to verify their franchisors’ representations through other sources, whether that means going online, sending an email or picking up the phone. Where to Find Information About Franchisors and Franchise Opportunities If you need to find information about your franchisor or a franchise you are considering purchasing, these sources are a good place to start: 1. Current Franchisees Franchisors are required to disclose their current franchisees’ addresses and phone numbers in Item 20 of the FDD. If you have questions, there is a good chance that other franchisees in the system have either had the same question before or turned to other franchisees for help in other circumstances. As a result, you will often find that existing franchisees are more than happy to share what they know. 2. Former Franchisees The mandatory disclosures in Item 20 also include addresses and telephone numbers for franchisees who have left […]


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When is a Franchise Termination “Wrongful”?

January 16, 2018

Under a typical franchise agreement, the franchisor’s and franchisee’s relationship can end in one of two ways: (i) the franchise agreement can expire at the end of an initial or renewal term, or (ii) one party (most likely the franchisor) can terminate the agreement before it expires. Franchisors routinely reserve the contractual right to terminate their franchisees “for cause.” A for-cause termination involves ending the relationship based upon a default under the franchise agreement, most commonly the franchisee’s failure to pay royalties. However, even in a situation where the franchisor has reserved broad rights to terminate, there are a variety of circumstances under which the franchisee will be able to seek legal remedies for a wrongful termination. Understanding Wrongful Termination of a Franchise Agreement What makes a franchise termination “wrongful”? A termination is considered wrongful any time a franchisor terminates a franchisee in without the legal right to do so. This includes terminations in bad faith, terminations in violation of the terms of a franchise agreement, and terminations in violation of state law. Some of the most-common examples of franchisees’ claims in wrongful termination litigation include: The franchisor terminated on grounds not provided for in the franchise agreement; The franchisor falsely alleged a material default or failure to cure; The franchisor violated the franchisee’s rights under a state franchise relationship law; The franchisor refused to renew the franchise agreement in bad faith; and, The franchisor manufactured an alleged default in order to justify a termination pursued for other reasons (i.e. […]


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What Do Prospective Franchisees Need to Know about Financial Performance Representations (FPR)?

January 11, 2018

Item 19 of the Franchise Disclosure Document (FDD) is titled, “Financial Performance Representations.” In this Item, franchisors have the option to provide information, “about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document.” Providing a financial performance representation (FPR) in Item 19 is optional. If a franchisor chooses not to provide an FPR, it must include a “negative disclosure” which states: “We do not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting [name, address, and telephone number], the Federal Trade Commission, and the appropriate state regulatory agencies.” Many franchisors choose to provide this negative disclosure. While financial performance representations are of obvious interest to prospective franchisees, improperly-prepared FPRs can expose franchisors to litigation. As a result, rather than take the time to prepare an accurate and substantiated FPR, franchise executives (and their lawyers) often opt for the safer and simpler route. But, let’s suppose that you have received an FDD that includes an FPR. What […]


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Recent Blogs on Franchise, Dealership and Antitrust Law

Trends in Franchising: What Franchisees Can Expect in 2018

Jan 25, 2018

As a franchisee, finding success means meeting customers’ demands while...


Read More

What Do Prospective Franchisees Need to Know About SBA Loans?

Jan 23, 2018

As a prospective franchisee, you have a handful of options when it comes to...


Read More

Trust But Verify: 7 Resources for Finding Information About Your Franchisor

Jan 18, 2018

When you buy a franchise, your decision to move forward is largely based...


Read More

What Do Prospective Franchisees Need to Know about Financial Performance Representations (FPR)?

Jan 11, 2018

Item 19 of the Franchise Disclosure Document (FDD) is titled, “Financial...


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

Free Consultation

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

Top Franchise Litigator for Franchisees and Dealers

Top Franchise Litigator for Franchisees and Dealers

2017 Finance Monthly Award

2017 Finance Monthly Award