Most franchise attorneys and franchise lawyers will agree that fair franchising is one of the most-used and least understood concepts in the franchise world. If you want to know the truth about fair franchising, sign up for our newsletter, Franchise Trends.  Fair franchising is an elusive concept. Many of the best franchise lawyers in the world are not able to readily provide a definition of the term. Without the assistance of a frachise lawyer who represents only franchisees, it is very difficult to achieve fair franchising. As a franchisee, if you believe that your franchisor owes you fair franchising, you’ll be disappointed. Nevertheless, an experienced franchisee lawyer or franchisee law firm can still provide tremendouos support to franchisees seeking franchise agreement assistance. Indeed, franchise lawyers have frequently managed to make franchise agreements more acceptable. But you need to begin the dialogue with your franchise attorney before you sign a franchise agreement.  As a franchise law firm, Goldstein has the expertise to analyze every aspect of proposed franchise agreements. Contact us online or call 202.293.3947 to evaluate your franchise agreement and ensure you’re treated fairly.

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Franchisees' Weapons Used for Franchisee Terminations   By: Jeffrey M. Goldstein 202 293 3947 goldlawgroup.com Washington, DC jgoldstein@goldlawgroup.com New Jersey is normally considered a ‘good state’ for franchisee terminations and franchise lawyers who represent only franchisees and dealers. This case, however, shows that on any given day, and despite the sophistication of legal representation, franchisees are subject to being blown out of the water on almost any ground. In this case, we see the Court use two relatively potent pro-franchisee legal weapons – the New Jersey Franchise Protection Act and the common law covenant of good faith and fair dealing – to bludgeon the franchisees to a legal death. Plaintiffs (franchisees) acted as independent insurance agents for Allstate under Exclusive Agency Agreements (“EAs”). Plaintiffs sought damages contending, inter alia, that Allstate wrongfully terminated their EAs and breached the implied covenant of good faith and fair dealing. The parties cross-moved for summary judgment, and the judge ruled against the franchisees concluding that: (1) applying the New Jersey Franchise Practices Act (“the Act to the insurer-agent relationships would interfere with the regulatory framework set out in New Jersey’s insurance code; (2) the relationship between Allstate and plaintiffs did not constitute a franchise under the Act; and (3) Allstate’s termination of the EAs did not contravene the implied covenant. First, the Court rejected the franchisees’ contention that the Act applies to their EAs based upon the Court’s finding that there was a direct and unavoidable conflict between the insurance laws and the franchise laws. […]

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By: Jeffrey M. Goldstein (202) 293-3947 jgoldstein@goldlawgroup.com Massage Envy escapes franchisee wage violations liability. Vicarious franchise liability is a pervasive problem for franchisors nowadays.  In Vann, an Individual, o/b/o Himself and All others Similarly Situate v. Massage Envy Franchising LLC, 2015 WL 74139 (S.D.Cal. 2015), the United States District Court for the Southern District of California dismissed claims against a massage franchisor, Massage Envy Franchising, LLC (“MEF”), for alleged violations of California minimum wage laws. Mr. Vann, one of the plaintiffs, worked as a massage therapist at two different California Massage Envy franchises, one of which was in Chula Vista, California (“Spa Chula Vista”), which was owned by Charis Group. In essence, the franchisor argued that MEF is not an employer of Mr. Vann and cannot be liable for any wage and hour violations made by a franchisee. Under California Labor Code section 1194, an employee who received less than the legal minimum wage is entitled to recover the unpaid balance. Only an employer has a duty to pay wages. The federal court’s ruling, using an analysis previously applied by California and some other states’ courts, focused on the degree of control that the franchisor had and exercised over the franchisee (Charis Group), which in turn directly employed the plaintiff. In so doing, the Court pointed out that: · MEF provided franchisee Charis Group with an Operations Manual that “contain[ed] mandatory and suggested specifications, standards, operating procedures and rules that [MEF] periodically prescribe[s] for operating a [franchise].” · Pursuant to […]

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