Author: Goldstein Law Firm

Don’t Overlook These Five Important Legal Issues When Buying a Franchise

Oct 30, 2020 - Blog by |

If you are thinking about buying a franchise, you know that you need to make an informed investment decision, and you know that you need to go into your franchise opportunity eyes wide open. But, do you know what this actually entails? While most prospective franchisees have a general idea of the financial risks involved with buying a franchise, far fewer have an appreciation of the legal risks that have the potential to place their entire investment in jeopardy. What kinds of legal risks are we talking about? Here are five important legal issues not to overlook when pursuing a franchise opportunity: Issue #1: Inadequate Territorial Protections What is your understanding with regard to your territorial rights? Are you to receive an “exclusive” or “protected” territory? If so, what do these terms really mean? While lots of franchisors offer their franchisees some form of territorial protection, protections vary greatly between franchise systems, and you need to make sure your franchise agreement clearly defines the rights you are being granted. Issue #2: Insufficient Protections for Renewal When the initial term of your franchise agreement expires, will you have the ability to renew? While it is fairly standard for franchisors to offer their franchisees renewal rights, these “rights” are usually contingent upon satisfying a broad range of requirements. If the conditions for renewal in your franchise agreement are too franchisor-friendly, you may find yourself on the outside looking in when your initial term expires. Issue #3: Termination Risks for Late Payments and […]

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Franchise Times Releases Its “Top 200+” Franchises for 2020

Oct 16, 2020 - Blog by |

On September 28, 2020, the Franchise Times released its list of the “Top 200+” franchises for 2020. The article announcing the release begins with a sobering proviso: “[T]his year’s Franchise Times Top 200+ may be the last look at the old world before 2020 results change everything.” As the International Franchise Association (IFA) recently reported, the franchise industry has been hit hard by the COVID-19 crisis, with more than 32,000 franchises closing in just the past six months. But, since the Franchise Times’ current Top 200+ list is based on 2019 data, the figures look pretty good. Franchise sales grew significantly last year, while the biggest brands in franchising continued to get even bigger: “Based on 2019 systemwide sales, franchising’s strongest brands gained strength, emerging hot brands kept bringing the heat and brands on the decline continued to slow. Aside from a few surprises, the momentum of franchising continued on the same upward trajectory seen in the last few years. “In all, the top-ranking 200 brands grew sales by 4.5 percent . . . . That represents a slight acceleration from last year, when the top 200 grew sales by 4.2 percent. . . . The top 10 brands grew even faster, expanding sales by 5.2 percent to add $16.2 billion, just over half of the overall sales growth for the first 200 on the list.” Big Names Continued to Dominate Franchising in 2019 While more companies turn to franchising every year, the Franchise Times’ data show that the big […]

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International Franchise Association (IFA): The COVID-19 Crisis is Having a Major Impact on the Franchise Industry

Oct 2, 2020 - Blog by |

A recent article from the International Franchise Association (IFA) sheds light on the significant impact that the COVID-19 crisis has had on the franchise industry over the past six months. The article, which relies on a report prepared by FRANdata, concludes by quoting the organization’s President and CEO as stating that, “COVID-19 has caused a staggering amount of business closures and layoffs across franchise businesses. . . . Additional broad-based and long-term Congressional action is desperately needed to stave off additional closures and layoffs, particularly for the hardest-hit businesses.” The COVID-19 Crisis’s Impact on the Franchise Industry The IFA’s article reports that in the first six months of the COVID-19 crisis, “[m]ore than 1.4 million franchise jobs [have been] lost, and more than 32,000 franchise businesses have closed.” This includes nearly 11,000 franchises that have closed permanently. Worryingly, the IFA projects that another 36,000 franchised businesses will close in the next six months if nothing is done to curb the economic impacts of the pandemic. Overall, FRANdata predicts that one in 20 small businesses will close permanently over the next six months if the current economic trends continue. Additional notable statistics from the FRANdata report include: As of the end of August, just 26 percent of franchises have resumed their normal operations or faced only minimal effects from the COVID-19 pandemic. On average, franchisees have experienced a 19.3 percent decline in revenue during the COVID-19 pandemic. Of the 1.4 million employees in the franchise industry who have lost their jobs, […]

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Attorney Jeffrey M. Goldstein Named “2020 Power Lawyer” by Lawyers of Distinction

Sep 29, 2020 - Blog by |

The Goldstein Law Firm is pleased to announce that founding attorney Jeffrey M. Goldstein has been named to Lawyers of Distinction’s “2020 Power Lawyers”. This is Mr. Goldstein’s second year in a row being selected for inclusion on this prestigious list, whose members are selected based upon a patented review and vetting process performed by Lawyers of Distinction’s Selection Committee. Lawyers of Distinction announced the “2020 Power Lawyers” in the September 6 edition of The New York Times. Mr. Goldstein is One of Only 55 Lawyers Nationwide Recognized with This Award Mr. Goldstein is one of only 55 lawyers nationwide selected for inclusion in the “2020 Power Lawyers”. More importantly, he is the only lawyer chosen for inclusion in the practice area of Antitrust & Franchise Litigation. In the vast majority of other practice areas, multiple lawyers were selected for inclusion. According to Lawyers of Distinction: “Lawyers of Distinction Members have been selected based upon a review and vetting process by our Selection Committee utilizing U.S. Provisional Patent # 62/743,254. The platform generates a numerical score of 1 to 5 for each of the 12 enumerated factors which are meant to recognize the applicant’s achievements and peer recognition. . . . Members are then subject to a final review for ethical violations within the past ten years before confirmation of Membership. A Lawyers of Distinction Nomination does not guarantee membership and attorneys may not pay a fee to be nominated.” The ”2020 Power Lawyers” were chosen according to an even […]

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Litigation Strategies for Antitrust and Franchise Litigation

Sep 24, 2020 - Blog by |

LITIGATION STRATEGIES FOR ANTITRUST AND FRANCHISE LITIGATION Even when you have a very strong case against a business opponent, you will face difficulty in achieving a satisfactory resolution without an effective and efficient litigation strategy. Your job is to find an expert litigator who can provide you with an accurate assessment of your case. As noted elsewhere on this website, not all lawyers are created equal. Not every lawyer is an expert, and not every lawyer approaches the practice of law from an intellectual perspective. Further, not every lawyer is a litigator; and, not every litigator focuses his or her practice in complex litigation in federal courts around the country. Moreover, not every case is amenable to the same type of strategy. A successful litigation strategy must be predictive, reactive and malleable in the face of constantly changing facts, conditions and events. Legal tactics that are used to further mediocre strategies are not likely to be effective. Tactics that masquerade as strategy are doomed from the start. Most important, superior legal strategies will be capable of causing changes to the future litigation battlefield terrain. A superior litigation strategist will have the self-confidence to believe that he or she can influence and control future events. Last, superior litigation strategists must possess well-developed predictive and reactive capabilities. It is not always easy to find an attorney who can provide you with a superior strategy for your litigation issue. Indeed, it is impossible to do so without affiliating yourself with an attorney who […]

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Examining the Quality of a Franchise Business Review

Sep 23, 2020 - Blog by |

The Right Lawyer Produces The Higher Quality Franchise Review  Unfortunately, the overwhelming majority of lawyers providing franchise agreement or FDD reviews produce a written memorandum for the client allegedly ‘summarizing’ the 300+ pages of the FDD, the franchise agreement or both. This is in almost all cases a waste of time, money and effort. In almost all cases, such lawyer memos are the result of a young associate’s or paralegal’s ‘filling in the blanks’ on a ‘form memo’ already on the lawyer’s hard drive. A more complete and highly accurate ‘summary’ of the terms in the franchise agreement is already incorporated in the FDD. Should a dispute between you and the franchisor later arise, the Court will not be interested in what your lawyer’s ‘summary memo’ told you about the terms of the franchise agreement; instead, the Court will look to the franchise agreement (and infrequently to the FDD). From a common sense point of view, the provision by your lawyer of another 15 page summary memorandum, on top of a 300+ page FDD and a 60+ page Franchise Agreement is relatively useless. Then why do lawyers do this? Very simply it is many times much cheaper and quicker for a lawyer to have his or her associate or paralegal ‘fill in the blanks’ on a form memo instead of personally doing a full and complete evaluation of each of the provisions of the franchise agreement. In addition, many lawyers who practice on behalf of both franchisors and franchisees do […]

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Ultimate Guide to Franchise Litigation for Franchisees – Part 3

Jul 31, 2020 - Blog by |

What Can You Expect in Mediation, Arbitration or Litigation? In Parts 1 and 2 of our Ultimate Guide to Franchise Litigation for Franchisees, we covered common issues in franchise litigation and common franchise agreement provisions that can impact franchisees’ rights during the dispute resolution process. In Part 3, we are covering what you can expect when you hire a franchise attorney to represent you in mediation, arbitration or litigation against your franchisor. Mediation and Arbitration: Two Very Different Forms of ADR While mediation and arbitration are often lumped together as forms of alternative dispute resolution (ADR), the reality is that these are very different proceedings. With mediation, there is no guarantee that the process will lead to a resolution. Instead, the parties negotiate with the help of a neutral third-party mediator, and they try to find a way to come to terms. In arbitration, however, the arbitrator’s role is to hear the parties’ evidence and then render a final decision. This decision is usually binding (as stipulated in the parties’ franchise agreement), although it may be possible to challenge the arbitrator’s decision in court in some cases. Mediation and arbitration both involve scheduled sessions at which the parties appear with their legal counsel. In mediation, these are essentially guided negotiation sessions, with the mediator serving to help keep the parties’ negotiations focused and offer potential compromise solutions. In arbitration, the parties will engage in some form of limited discovery beforehand, and then they will take turns presenting their evidence to […]

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Ultimate Guide to Franchise Litigation for Franchisees – Part 2

Jul 24, 2020 - Blog by |

What are the Relevant Provisions of Your Franchise Agreement? As with virtually all aspects of franchise ownership, when facing a dispute with your franchisor, one of the first things you need to do is review the relevant terms of your franchise agreement. Franchise agreements almost universally contain several terms that apply specifically to litigation and dispute resolution, and you will want to work closely with a franchise lawyer to make sure you understand how your franchise agreement impacts the options you have available. Does Your Franchise Agreement Contain a Mandatory ADR Clause? Many franchise agreements contain clauses that require the parties to submit most (but not all) disputes to mediation or arbitration. When franchisors include these provisions in their franchise agreements, they do so not because alternative dispute resolution (ADR) offers a level playing field, but because they believe that they can benefit from the process. Generally, mandatory ADR clauses apply to all franchisee-initiated disputes, and they apply to some disputes initiated by franchisors. Typically, disputes regarding franchisees’ payment obligations, unauthorized use of the franchisor’s trademarks and proprietary information, and other similar types of disputes are excepted. When mediation or arbitration is required, then pursuing mediation or arbitration will be a necessary precursor to pursuing litigation—assuming the mandatory ADR clause is enforceable. Where Does Your Franchise Agreement Require Disputes to Be Resolved? Franchise agreements also generally include jurisdiction and venue clauses that specify where mediation and arbitration must take place and where lawsuits need to be filed. Typically, this is […]

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Ultimate Guide to Franchise Litigation for Franchisees – Part 1

Jul 17, 2020 - Blog by |

What are the Grounds for Initiating Franchise Litigation? When you bought your franchise, you did not expect to end up with litigation with your franchisor. But, an issue has come up and there does not seem to be any other alternative, and you need to consider all of your options for protecting your investment. In this Ultimate Guide to Franchise Litigation for Franchisees, attorney Jeffrey M. Goldstein provides an overview of what franchisees need to know when facing contentious disputes with their franchisors. Here in Part 1, Mr. Goldstein covers the types of issues that tend to lead to litigation, with insights based on his 30-plus years of experience as a franchise litigation attorney exclusively representing franchisees. Common Issues in Franchise Litigation While there are numerous issues that can lead to litigation between franchisors and franchisees, some issues tend to come up more frequently than others. This includes issues that cause franchisors to initiate litigation against their franchisees, as well as issues that force franchisees to take action in order to try to save their franchises—or at least recoup as much of their initial investment as possible. On the franchisor side, some of the issues that most-commonly trigger the decision to take legal action against franchisees include: Non-payment of royalties or advertising fund contributions Non-payment of liquidated damages or “lost future royalties” post-termination Repeatedly operating outside of a franchisee’s designated territory Failing to adhere to system standards (either repeatedly or in a manner that represents a significant departure from the […]

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Should You Hire a Franchise Consultant to Help You Buy a Franchise?

Jul 10, 2020 - Blog by |

Buying a franchise is a big decision that requires a substantial investment, and there is a significant amount of risk involved. As a result, regardless of your background and experience, you are going to want help along the way. You know that you need to hire a franchise attorney to review the Franchise Disclosure Document (FDD) and help you negotiate the franchise agreement, but should you hire a franchise consultant as well? What Should You Look for in a Franchise Consultant? For many prospective franchisees, hiring a franchise consultant will be a good option. If you need help with things like budgeting and site selection, an experienced franchise consultant will be able to provide a lot of value as you work toward opening your franchise. If you believe that you could benefit from working with a franchise consultant, here are some factors to consider when choosing someone to advise you: Franchise Industry Experience – The franchise industry is unique in many respects; and, in order to advise you effectively, a franchise consultant will need to have deep industry experience. Ideally, he or she will have past experience as a successful franchisee or as a franchisor executive. Objectivity – When working with a franchise consultant, you need to be confident that he or she is providing objective advice. If it feels like a consultant is steering you toward a particular franchise opportunity, you will want to make sure this is based on an assessment of your best interests and not other […]

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Antitrust and Franchise Law Firm of the Year in DC

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Leading Professionals in Law

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Franchise Law
in the District of Columbia

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Franchise Law Firm
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Legal 100
2018

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Lawyer International
Legal 100
2019

ACQ5 LAW AWARDS 2019

US (New York)
Franchise Lawyer
of the Year
ACQ5 GLOBAL AWARDS 2019, JEFF GOLDSTEIN, GOLDSTEIN LAW FIRM, PLLC

ACQ5 LAW AWARDS 2019

US (New York)
Franchise Law Firm
of the Year
ACQ5 GLOBAL AWARDS 2019, GOLDSTEIN LAW FIRM, PLLC

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Top Franchise Litigator for Franchisees and Dealers

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ACQ5 LAW AWARDS 2018

Franchise Law Firm
of the Year
ACQ5 LAW AWARDS 2018

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Franchise Law Firm
of the Year
ACQ5 LAW AWARDS 2019

Franchise Law Firm of the Year

Franchise Law Firm of the Year

Franchise Law Firm of the Year

Franchise Law Firm of the Year
Global Awards 2017

Global Law Experts

Franchise Law Firm
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Finance Monthly Law Awards - 2018

Finance Monthly Law Awards - 2018

Franchise Law Firm of the Year

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Goldstein Law Firm, PLLC

1629 K St. NW, Suite 300,
Washington, DC 20006

Phone: 202-293-3947
Fax: 202-315-2514

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