With dozens of pages and tens of thousands of words, franchise agreements are long, complicated and difficult to read. But, when buying a franchise, understanding the terms of your franchise agreement is extremely important, and there are three little words that could drastically increase the risks of moving forward. These words are “lost future royalties.”
Author: Goldstein Law Firm
The franchise industry is booming. There are more franchisors than ever before, and various sources indicate that there are currently well over 750,000 franchised outlets in the United States. So, why is this the case? Why do so many people choose to buy a franchise instead of starting an independent business? National franchisee lawyer Jeffrey M. Goldstein shares his thoughts.
Franchise agreements contain lots of “boilerplate” terms—or at least it seems that way. Once you get past the royalty fees, territory provisions and renewal rights, most franchise agreements look more or less the same. Even so, these “boilerplate” terms are extremely important. If your franchise lawyer overlooks them, you could end up unknowingly agreeing to some heavily one-sided provisions.
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.
According to the Franchise Times, the CEO of the company that owns Fatburger, Johnny Rockets, Twin Peaks, Fazoli’s and other restaurant chains is under investigation by the U.S. Securities & Exchange Commission (SEC) for securities fraud and other crimes. At present, the SEC’s investigation remains ongoing, and no charges have been filed. However, the publicity surrounding the investigation (which has also been reported by the Los Angeles Times and other media outlets) is almost certainly having a negative impact on the company’s brands. So, what does this mean for these brands’ franchisees? National franchise lawyer Jeffrey M. Goldstein explains.
As recently reported by the Franchise Times, the U.S. Federal Trade Commission (FTC) has filed a lawsuit against Burgerim alleging franchise fraud. According to the publication, the FTC is, “accusing the fast-food chain and its owner, Oren Loni, of enticing more than 1,500 people to purchase franchises ‘using false promises while withholding information required by its Franchise Rule.’” This is a notable development in the world of franchising, as franchise attorney Jeffrey M. Goldstein explains.
There are lots of legal aspects to franchise ownership. As a franchisee, you don’t need to be an expert in franchise law, but you do need to make sure you are relying on the advice of an experienced franchise lawyer. Without an in-depth understanding of the FTC Franchise Rule, your state’s franchise laws (if any), the terms of your franchise agreement and the case law surrounding franchising, you can easily overlook issues that present major risks for your franchise.
You’ve decided to leave your job to buy a franchise. You’ve assessed your finances, you’ve decided on a particular franchise opportunity and now you are ready to buy. How do you move forward? Once you sign the franchise agreement, what can you expect as a franchisee? The franchisee lawyers at Goldstein Law Firm explain.
You are ready to make the transition from employee to franchisee, and you have determined that you have the financial wherewithal to move forward. Now the question is: Which franchise opportunity should you pursue? While many employees seek to buy into the brand they have served, as national franchisee lawyer Jeffrey M. Goldstein explains, employees should not default to this choice automatically.
For many people, the desire to own a franchise stems from a desire to be their own boss. They’ve been an employee for years, perhaps decades, and they are ready to take control of an outlet of their own. If you are thinking about transitioning from employee to franchisee, what is your first step? National franchisee attorney Jeffrey M. Goldstein explains.