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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

FDDs, Franchise Agreements and Operations Manuals – What Do Prospective Franchisees Need to Know?

May 18, 2018

When you buy a franchise, the terms of your relationship with the franchisor will primarily be governed by three documents: (i) the Franchise Disclosure Document (FDD), (ii) the Franchise Agreement and (iii) the Operations Manual. These are three very different documents that impact your rights and obligations in different ways, and having a basic understanding of each is one of the first steps toward understanding what you can expect as a franchisee. 1. The Franchise Disclosure Document When you apply to purchase a franchise, the franchisor will provide you with a copy of its Franchise Disclosure Document. The FDD is a federally-mandated form disclosure which consists of 23 “Items” and a series of exhibits or attachments. Although the form of the FDD is established by federal regulation and there are industry standards for the information that franchisors choose to disclose, the FDD should still be heavily-customized to reflect the unique terms of your chosen franchise opportunity. FDDs can be dense and difficult to digest. But, it is important that you take the time to understand the information disclosed (as well as the implications of any missing or “negative” disclosures). For help dissecting the FDD, you can read: Understanding Your Franchisor’s FDD – Part 1(Items 1 through 7) Understanding Your Franchisor’s FDD – Part 2(Items 8 through 14) Understanding Your Franchisor’s FDD – Part 3 (Items 15 through 23) 2. The Franchise Agreement The Franchise Agreement is the contract you sign when you purchase a franchise. This is a legally-binding and […]


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5 Mistakes to Avoid if You are Facing a Potential Dispute with Your Franchisor

May 16, 2018

As a franchisee, there is a reasonable probability that, at some point, you will have a disagreement with your franchisor. Whether you think that advertising fund contributions could be better spent or you believe that the franchise system is failing as a whole, the longer you own your franchise, the more likely it will become that a dispute will arise. Not all disputes are grounds for litigation. Franchise agreements provide extraordinarily-broad protections to franchisors; and, in some cases, it simply will not be worth the cost to hire an attorney. But, franchise litigation is more common than many franchisees realize; and, if you think you may have a claim against your franchisor (or if you are concerned that your franchisor may take legal action against you), it is worth taking appropriate steps to prepare. What Not to Do When Anticipating Franchise Litigation When preparing for the possibility of litigation (or mandatory mediation or arbitration), knowing what not to do is just as important as knowing what to do. The following are all potentially-costly mistakes that franchisees should avoid when anticipating mediation, arbitration or litigation with their franchisor: 1. Stopping Payment of Royalties and Advertising Fund Contributions No matter how dissatisfied you may be with your franchisor, and regardless of whether your franchisor has violated the terms of your franchise agreement, you should not stop payment of royalties and advertising fund contributions unless advised to do so by your legal counsel. Even if your franchisor owes you money, you are not […]


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Franchise Disclosure Documents and Dr. Frankenstein

May 2, 2018

Franchise Disclosure Documents and Dr. Frankenstein By: Jeffrey M. Goldstein An article in the WSJ today provides a glimpse of the interesting results obtained by Professor Uri Benoliel in a new franchise study finding that it takes more than 20 years of education to understand a Franchise Disclosure Document (FDD). The conceptual purpose of disclosure under the FDD is simple – to provide the potential franchisee with all material facts, accurately and concisely, so that he or she may understand and evaluate what he or she is considering buying. Using that simple goal as the benchmark of success, from my perspective, the Federal Trade Commission’s FDD program in practice has been a tremendous failure. The WSJ article accurately sets forth the rote responses to the study of the two other main players in the omnipresent FDD debate: the FTC and the IFA. The FTC, the Dr. Frankenstein of the FDD program, of course “declined comment.” And, the IFA, the titular spokesman for all franchisors, simply ‘read out loud’ one of the canned responses it gives to every inquiry regarding any pro-franchisee observation or proposal: ‘Buying a franchise is complex; make sure that you do your due diligence before buying.’ However, in the IFA’s defense, there’s really no need for it to do any meaningful work on researching the FDD dispute or providing intellectually honest answers regarding it. The number of national lawyers representing solely franchisees has dwindled literally to under a handful, and the number of academics siding with franchisees […]


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What are Franchisees’ Rights When the Franchisor Sells the System?

April 30, 2018

While franchisees’ transfer rights are usually subject to numerous conditions, franchisors typically reserve broad rights to sell the system. Franchisors do not need their franchisees’ consent to sell, and they are not required to cure outstanding defaults or consider the potential impact on franchisees when they seek to court the highest bidder. As a result, sales of successful franchise systems are common, with typical buyers including competing brands as well as private equity companies seeking to add assets to their portfolios. Earlier this year, Red Lion Hotels Corporation agreed to buy the Knights Inn franchise system from Wyndham Worldwide for $27 million. BrightStar Care also recently acquired the regional chain, HomeChoice Senior Care, for an undisclosed sum. While the consequences of these types of sales can vary, some of the potential implications for franchisees include the following: 1. Limited Options for Challenging the Sale Generally speaking, franchisees’ options for legally challenging the sale of a franchise system are limited. Franchise agreements almost universally include provisions acknowledging the franchisor’s right to sell; and, even though these provisions are extraordinarily one-sided, they will typically be enforced by the courts. It is standard for proposed sales and the terms of franchise system acquisitions to be kept confidential, so the “surprise” of learning that you will have a new franchisor is generally not sufficient grounds to pursue a claim for bad faith or fraud. There may be exceptions in limited circumstances (for example, if you recently purchased your franchise and specifically relied on representations […]


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What Happens if I Stop Paying My Franchise Royalties?

April 27, 2018

As a franchisee, if you are wondering about the consequences of ceasing to pay royalties, this likely means one of two things: Either (i) you are facing a dispute with your franchisor and you do not believe that you should have to pay, or (ii) you are unable to pay your royalties and pay your business’s other monthly expenses. While your desire to withhold payment of royalties (and potentially your advertising fund fees as well) is understandable, there are several reasons why this is not likely to be a good idea. The Risks of Withholding Royalties as a Franchisee Nonpayment of royalties is almost certainly considered a material default under the terms of your franchise agreement. Franchisors aggressively protect their “right” to payment, and many franchisors will not hesitate to declare a default when a royalty check or electronic funds transfer (EFT) doesn’t come through. Most franchise agreements also include a “no offset” provision, which states that the franchisee does not have a right to withhold payment on the grounds that it is owed money from the franchisor. So, if you stop paying your royalties, sooner or later your franchisor will declare a default; and, not only could you be on the hook for your outstanding royalties, but potentially for lost future royalties as well. What if I Have a Claim Against My Franchisor? What if you have a claim against your franchisor? What if your franchisor has not provided the support it promised? Or, what if your franchisor granted […]


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Recent Blogs on Franchise, Dealership and Antitrust Law

FDDs, Franchise Agreements and Operations Manuals – What Do Prospective Franchisees Need to Know?

May 18, 2018

When you buy a franchise, the terms of your relationship with the...


Read More

5 Mistakes to Avoid if You are Facing a Potential Dispute with Your Franchisor

May 16, 2018

As a franchisee, there is a reasonable probability that, at some point, you...


Read More

What are Franchisees’ Rights When the Franchisor Sells the System?

Apr 30, 2018

While franchisees’ transfer rights are usually subject to numerous...


Read More

What Happens if I Stop Paying My Franchise Royalties?

Apr 27, 2018

As a franchisee, if you are wondering about the consequences of ceasing to...


Read More
Solutions franchise blog image

Reformist Thoughts on Franchise, Dealership, Distribution and Antitrust Law

2017 Best Franchise Litigators

April 11, 2018

2017 Best Franchise Litigators -- USA By Jeffrey M. Goldstein  Over my 30 years of practice I’ve from time to time been asked by clients “if we hadn’t chosen you as our litigator, which lawyers would you have recommended that we had chosen to litigate our case?” Just again two...


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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