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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

FAQs: What Do Franchisees Need to Know About Renewal?

March 22, 2019

All franchise agreements expire. While the goal of buying a franchise is to build a sustainable business that generates profits for years to come, the reality is that many franchisees struggle to recoup their initial investment before their initial term expires. If the initial term of your franchise agreement is about to expire, what do you need to know about renewal? Here are answers to some frequently-asked questions (FAQs): Answers to Frequently-Asked Questions (FAQs) about Franchise Renewal Q: Can my franchisor refuse to renew my franchise agreement? In general, a franchisee’s “right” to renew is subject to a laundry list of conditions set forth in the franchise agreement. If you fail to satisfy any of these conditions by the date your original franchise agreement expires, then your franchisor may refuse to renew your franchise. State franchise laws provide protections against bad-faith refusals to renew in some cases. Q: What do I have to do in order to exercise my right to renew? In order to exercise your “right” to renew, you must satisfy all of the renewal conditions stated in your franchise agreement before your initial term expires. Minimally, this will likely mean curing any outstanding payment deficiencies, updating to current system standards, and signing the franchisor’s “then-current” form of franchise agreement. Q: Will I be required to sign a new franchise agreement in order to renew? In most cases, yes. Franchisors generally include execution of their “then-current” franchise agreement as a condition of renewal. However, while you may be […]


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5 Special Considerations for Buying a Hotel Franchise

March 15, 2019

Hotel chains dominate the hospitality market, and some hotel chains are among the largest and most well-known franchised brands in the world. As a result, many prospective franchisees find the idea of owning a hotel to be a desirable one, and they believe that the substantial up-front investment will more than pay off in the long term. While this is certainly the case for some hotel franchisees, building and operating a successful hotel is a challenge even for the most-seasoned business owners. When you add in the costs and inherent challenges involved in operating under a franchised model, finding success as a hotel franchisee is far from certain. At the Goldstein Law Firm, in addition to representing prospective hotel franchise owners in franchise agreement negotiations, we also have extensive experience representing hotel franchisees in litigation with their franchisors. If you are thinking about buying a hotel franchise, here are some of the key risks to keep in mind: 1. Substantial Initial Investment Although many franchises can be launched with less than $100,000, building or renovating a hotel is generally a multi-million-dollar endeavor. While much of this initial investment is attributable to costs you would incur regardless of whether you were building a franchised or non-franchised hotel, you will still be required to pay a significant up-front initial franchise fee to the franchisor. In any case, before making such a significant investment, it is critical to ensure that you have taken appropriate legal measures to protect yourself as much as possible. […]


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Can My Franchisor Audit My Franchise?

March 8, 2019

If you signed your franchise agreement without reading it carefully, you might be surprised to learn that your franchisor has a broad right to audit your franchise. Franchisors almost universally reserve this right; and, while audits are ostensibly intended to ensure that franchisees are accurately calculating their royalty fee and marketing fund contribution obligations, franchisors often use them as tools for establishing grounds for default and terminating underperforming or “difficult” franchisees. So, your franchisor has announced that it will be auditing your franchise. What do you need to know? Protecting Your Rights During a Franchise Audit 1. What Does Your Franchise Agreement Say? When faced with an audit, the first thing you should do is review your franchise agreement. What does it say about audits? Are there any restrictions on how frequently your franchisor can audit your franchise or how much advance notice your franchisor must provide? Can your franchisor hire a third-party auditor to inspect your books and records? What is the permissible scope of the audit? 2. Do You Have Anything to Worry About? Assuming your franchisor is within its rights to conduct the audit, your next order of business should be to conduct an internal audit of your own. Is it possible that you could have underreported your gross revenue—could you be at risk for being declared in default of your franchise agreement? If you have any concerns, you should come up with a plan to address them proactively before your franchisor has a chance to send […]


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Franchise Fees, Royalties, Marketing Fund Contributions…How Much Does It Really Cost to Own a Franchise?

March 1, 2019

Buying a franchise is an investment. But, beyond your initial franchise fee (and potentially other startup expenses), as a franchise owner you are likely to incur a number of other ongoing costs that you would not have to pay as an independent business owner as well. So, how much does it really cost to own a franchise? Additional Costs of Franchise Ownership (vs. Owning an Independent Business) The following are all examples of fees and costs that franchisees may be required to pay their franchisors: 1. Initial Franchise Fee The initial franchise fee is an up-front, one-time payment that is typically due at the time of signing or within a specified period of time (such as 30 days) after signing the franchise agreement. Initial franchise fees vary from one franchise system to the next, but are usually somewhere in the range of $15,000 to $30,000. 2. Lease, Branded Products and Other Startup Expenses In some systems, franchisees may be required (or have the option) to lease their facilities from their franchisor, and they may be required to make an initial purchase of branded products and various other mandatory purchases as well. When leasing or purchasing from a franchisor or a designated supplier, it is critical to ensure that you are paying fair market value – which will not always be the case. 3. Royalty Fees Royalty fees are typically calculated as a percentage of the franchisee’s gross revenue, although there are some different royalty structures out there (such as flat […]


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A Franchisor is Refranchising. Should You Buy?

February 28, 2019

While “refranchising” may sound like a unique and innovative concept, in reality all it means is that a franchisor has decided to sell its company-owned outlets to independent owners. Franchisors ranging from startups seeking to transition from company ownership to McDonalds and other global brands have undertaken refranchising campaigns with varying degrees of success; and, for prospective franchisees, buying an existing company-owned outlet involves some unique legal and business considerations. First and foremost, it is important not to lose sight of the fact that there is a reason why the franchisor has chosen to refranchise. If the franchisor doesn’t want to own its stores or restaurants, why should you? While there may be a reasonable explanation for the sell-off (such as unloading unmanageable overhead or capital expenses), as a prospective franchisee, you need to feel confident that you are not buying a sinking ship. Some other legal considerations for buying an existing company-owned outlet include: 1. Initial Investment Aside from the purchase price, you are still likely to face a sizable initial investment. Franchisors still typically charge initial franchise fees to “conversion” franchisees, and you may also need to fund remodeling expenses, upgrade costs, and other capital expenditures. You will likely incur some of the other startup costs listed in Item 7 of the Franchise Disclosure Document (FDD) as well; and, even though you are buying an existing business, you will still likely want to establish a sizable capital reserve. 2. Royalties and Advertising Fees When the franchisor operated the […]


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Recent Blogs on Franchise, Dealership and Antitrust Law

FAQs: What Do Franchisees Need to Know About Renewal?

Mar 22, 2019

All franchise agreements expire. While the goal of buying a franchise is to...


Read More

5 Special Considerations for Buying a Hotel Franchise

Mar 15, 2019

Hotel chains dominate the hospitality market, and some hotel chains are...


Read More

Can My Franchisor Audit My Franchise?

Mar 8, 2019

If you signed your franchise agreement without reading it carefully, you...


Read More

Franchise Fees, Royalties, Marketing Fund Contributions…How Much Does It Really Cost to Own a Franchise?

Mar 1, 2019

Buying a franchise is an investment. But, beyond your initial franchise fee...


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