Search Results: encroachment

Nov 30, 2023

For many franchisees, territorial protections are essential to their profitability. Facing competition from multiple businesses serving potential clients or customers both in person and remotely, franchisees need to know that they will not face additional competition from within their own brands.

Mar 3, 2022

As a franchisee with a protected territory, you expect your franchisor to respect your territorial rights. After all, your franchisor granted them to you in the first place (unless you live in one of the limited numbers of states that provide statutory territorial protections to franchisees). But, what if it doesn’t? What if your franchisor encroaches on your protected territory? Franchise attorney Jeffrey M. Goldstein explains.

May 23, 2018

As a franchisee, encroachment by the franchisor or another franchisee can be among the greatest risks to long-term sustainability. If would-be customers (most of whom do not understand independent franchise ownership) have access to your brand at a more-convenient location, they will have little incentive to visit your store or restaurant. As a result, territorial protections are among the most-important protections available to franchisees, and state franchise relationship laws often provide critical protections when disputes regarding encroachment arise. A recent successful lawsuit filed by El Pollo Loco franchisees in California state court illustrates the types of protections that are available to franchisees in cases of encroachment: California Jury Rules in Favor of Husband-and-Wife Franchisee The case involved a dispute between husband-and-wife franchisees Michael and Janice Bryman and restaurant franchisor El Pollo Loco Inc. According to news reports, the Brymans sued after their franchisor opened two new locations within their territory. El Pollo Loco Inc. apparently did so in reliance on a standard provision in their franchise agreement which stated that it had the right to place company-owned locations “in the immediate vicinity of or adjacent to” its franchisees’ outlets, the franchisee’s territorial rights notwithstanding. Critically, prior to the jury verdict on damages, the trial judge ruled that this provision of the franchise agreement was unconscionable as a matter of law. As such, it was unenforceable, and could not be used to justify the opening of two company-owned outlets that competed directly with the franchisees’ restaurants. Subsequently, the jury also found […]

Apr 8, 2018

Reasonable Franchise Growth or Unreasonable Encroachment? By: Jeffrey M. Goldstein New franchise openings are a lightning rod in the franchise world; while franchisor advocates see new location openings as a legitimate mode of franchise growth, franchisee advocates view such openings as unreasonable franchise encroachment. On a semantic level, one of the most exasperating problems hindering meaningful discussion of the franchise growth issue is the unsystematic and undisciplined use of the term encroachment. Very simply, encroachment is an outcome-determinative term; as used in the franchise context it includes both reasonable and unreasonable growth. Accordingly, because it includes any growth that could or does cause any negative impact on an existing franchisee, the term is descriptively, conceptually and analytically useless at best, and destructive at worst. Further, the term encroachment similarly fails to account for the crucial distinction between non-opportunistic and opportunistic growth. In this regard, opportunistic behavior may be found in both the reasonable and unreasonable growth scenarios. Making matters worse from a semantic perspective is that the term opportunism itself is uncertain, ambiguous and anecdotal. Although opportunism in the relevant law and economics literature possesses elements of selfishness and self-interest, there is no consensus on whether all forms of opportunism harm efficiency. Again, the literature has failed to provide a uniformly-accepted definition of opportunism in the world of contracts, economics and franchising. Whereas many types of conduct have been identified as opportunistic (e.g., shirking, free-riding, stealing), no uniform theoretical definition has been formulated or accepted. One common element of many […]

May 7, 2015

Franchisor Encroachment: Beware of Your Franchise Agreement As with most issues in franchise law that end up in litigation, your chances of prevailing in court against your franchisor on a claim that the franchisor has violated your exclusive territory may be wholly dependent on the specific language that you and your lawyer were successful in having included in your franchise agreement. Also, as you will see below, the legal analysis that must be undertaken to negotiate a franchise agreement to fully protect a franchisee from all types of potential encroachment is too complex and esoteric to be performed adequately without expert legal assistance. I have encountered prolific cases where the franchisee, whose business has been decimated by encroachment, has told me that he “thought” that the language he had personally negotiated and included in the franchise agreement granted him an exclusive territory. In many of these cases, contrary to the beliefs of these franchisees, the franchise agreements contained no language whatsoever regarding an exclusive territory. In other cases, even where the franchise agreement did contain some language relating to an exclusive territory, the language actually gave the franchisor explicit permission to open competing franchises anywhere that the franchisor chose to put them. Although the specific language in a franchise agreement addressing or relating to an exclusive territory often differs for each franchise brand (and many times even within the same brand), it is possible to categorize “exclusive territory” language into four general types: (1) language that grants a franchisee only […]

May 4, 2015

Our Franchise Attorneys Can Help With The Real And Momentous Danger That Is Franchisor Encroachment Franchisees and dealers are frequently confronted with the real and momentous danger arising from supplier and franchisor encroachment. Franchise encroachment usually stems from the opening of new and competing franchises or distributors near the geographic territory of an existing franchise or dealership. Similarly, franchisors, suppliers or manufacturers’ newly-adopted marketing plans, whereby they distribute products and services directly to retail customers, present a threat to franchisees and dealers as they are cut out from the existing distribution and profit chain. Dealers and Franchisees are highly vulnerable to such territorial and sales encroachment given that the language in most franchise and distribution agreements explicitly permits it. From a historical perspective, at the time franchising initially began, franchisors, suppliers and manufacturers ordinarily, as a matter of course, granted franchisees and dealers some type of territorial exclusivity. Under market conditions at that time, such protection was expected and demanded by franchisees and dealers. Similarly, franchisees and dealers were protected from direct competition from their franchisors, suppliers and manufacturers through new distribution channels. As franchising matured as a distribution method, and as legal and economic power shifted precipitously toward franchisors and suppliers, the language in distribution and franchise agreements safeguarding franchisee or dealers’ territories and customers was intentionally abandoned by franchisors and suppliers when they drafted franchise or distribution agreements. As the pendulum of power continued to swing further away from franchisees and dealers, franchise and distribution agreements began to […]

Feb 18, 2025

Get the Advice You Need from an Experienced Franchise Lawyer Whether you own a franchise or are thinking about buying a franchise, it is critical to ensure that you are making informed decisions with your long-term best interests in mind. This applies at all stages of franchise ownership—from reviewing Franchise Disclosure Documents (FDDs) and franchise agreements to facing termination and enforcement of post-termination covenants. With nearly 40 years of experience, franchise attorney Jeffrey M. Goldstein has the insights you need, and he can help you confidently move forward. Mr. Goldstein represents prospective and active franchisees in Tampa as well as franchisees in other locations that are facing disputes with Tampa-based franchisors. Regardless of your needs, you can get started with a free consultation, and you can use the insights gained from this consultation to make informed decisions about your next steps. Contact us to schedule a call today. Our Services for Prospective Franchisees in Tampa If you are going through the franchise buying process, there is a lot you need to know. Making informed decisions is crucial, as making uninformed decisions can prove extremely costly. If you overlook concerns during the buying process, if you rely on incomplete or misleading information, or if you fail to negotiate key protections into your franchise agreement, you could find yourself struggling to recoup your initial investment. We can help you avoid costly mistakes. At Goldstein Law Firm, we offer several fixed-fee franchise business review packages for prospective franchisees in Tampa. We can also […]

Feb 18, 2025

Experienced Franchise Attorneys Representing Franchisees in Florida Goldstein Law Firm is one of the few firms in the country that exclusively represents franchisees. If you are thinking about buying or selling a franchise, if you are facing a dispute with your franchisor in Florida, or if you are facing termination of your franchise rights, a franchise attorney at Goldstein Law Firm can guide you forward. Our firm is led by franchise attorney Jeffrey M. Goldstein, who has devoted his entire career in the private sector—spanning nearly 40 years—to protecting the interests of prospective, active and former franchisees. If you have questions, he can help you make informed decisions, and he can take any necessary legal action on your behalf. We Represent Prospective, Active and Former Franchisees Across Florida We represent prospective, active and former franchisees across Florida in all franchise-related matters. We also represent franchisees in other states who are dealing with Florida-based franchisors. If you need legal advice or representation for any franchise-related matter, we invite you to contact us for a complimentary consultation to discuss what we can do to help. We serve clients in cities including, but not limited to: Cape Coral Fort Lauderdale Hialeah Jacksonville Miami Orlando Port St. Lucie St. Petersburg Tallahassee Tampa How Can We Help You? So, what can we do to help you? Our franchise lawyers regularly represent clients in connection with matters such as: Buying a Franchise in Florida We have extensive experience representing prospective franchisees. If you are thinking about […]

Feb 18, 2025

Franchise Lawyers Experienced in Franchise Business Reviews, Franchise Agreement Negotiations and Dispute Resolution in Denver Franchise ownership is not easy. As a franchisee, you must find a way to be successful within the confines of the franchise system, and you must be prepared to protect your investment when things don’t go according to plan. This makes it critical to work with an experienced franchise lawyer throughout the ownership lifecycle. At Goldstein Law Firm, we provide highly experienced legal representation to current and prospective franchisees. Firm founder and franchise lawyer Jeffrey M. Goldstein has more than 40 years of experience in franchising. Throughout his career, Mr. Goldstein has exclusively represented franchisees and dealers, and he is committed to preserving franchisees’ rights in Denver and nationwide. How We Can Help So, how can we help you? We focus our franchise law practice in three main areas: (i) helping prospective franchisees make informed buying decisions, (ii) negotiating franchise agreements on behalf of prospective franchisees, and (iii) protecting franchisees’ rights in disputes with their franchisors. Making an Informed Decision About Buying a Franchise in Denver Buying a franchise is a complex investment. It is also a high-risk investment—as you really can lose everything if you aren’t careful. As a result, if you are thinking about buying a franchise, it is well worth ensuring that you are making an informed buying decision. Here are just some of the ways a franchise lawyer at Goldstein Law Firm can help: Assisting with your due diligence, including helping […]

Feb 18, 2025

Experienced Franchise Lawyers Exclusively Representing Current and Prospective Franchisees in Colorado Buying a franchise is a significant investment. Whether you are thinking about buying your first franchise or are preparing to expand your franchise portfolio, it is critical to ensure that you are making informed and strategic decisions throughout the process. At Goldstein Law Firm, our franchise lawyers rely on decades of experience to help franchisees in Colorado with all levels of experience make sure they are not unknowingly taking risks that they could—and should—have avoided. We also represent franchisees who are facing disputes with their franchisors. Whether you own a franchise in Colorado or are facing a dispute with a Colorado-based franchisor, we can help you efficiently target a favorable resolution. Whether you need to fight to protect your franchise or are ready to move on, we can use our experience to help you avoid unnecessary financial losses. Areas We Serve Firm founder and franchise lawyer Jeffrey M. Goldstein has extensive experience advising and representing franchisees at all stages of ownership. Mr. Goldstein represents current and prospective franchisees throughout Colorado, in addition to representing out-of-state franchisees in disputes with Colorado-based franchisors. The areas we serve in Colorado include (but are not limited to): Arvada Aurora Boulder Colorado Springs Denver Fort Collins Grand Junction Lakewood Loveland Pueblo Thornton Westminster Regardless of where you are located, if you need an experienced franchise lawyer, we invite you to get in touch. Once you do, we will schedule a time for you to […]