As we discussed last month, the Franchise Times recently released its “Top 400” list for 2025. Along with the list itself, the Franchise Times also published a handful of articles highlighting certain categories of franchises that made (or almost made) the list. One of these articles highlights five “breakout brands” that have reported significant sales growth over the past year. If you are thinking about buying a franchise, should you include a “breakout brand” on your short list? Here are some key considerations from national franchise attorney Jeffrey M. Goldstein.

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Buying a franchise is an investment that requires informed and confident decision-making. If you are thinking about buying a franchise in 2026 and are new to the world of franchising, there is a lot you need to know. While buying a franchise can prove to be a profitable investment in the right circumstances, there are no guarantees. As a result, before you commit, it is critical to ensure that you have given due consideration to all of the risks involved. Learn more from national franchise lawyer Jeffrey M. Goldstein.

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A recent article on Franchise Direct discusses the potential benefits of purchasing an “unconventional” franchise. It acknowledges the fact that new franchisees are increasingly becoming less interested in traditional brick-and-mortar storefront businesses, and it notes that alternate franchise opportunities “often work with lower overhead, meet specific market needs, and provide a fresh perspective on what it means to be a business owner.” But is it a good idea to choose an unconventional franchise? National franchise attorney Jeffrey M. Goldstein shares his thoughts:

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The Franchise Times recently released its “Top 400” list for 2025. As the publication explains, the list reflects “the biggest franchise brands by global systemwide sales.” But the list provides some other notable insights into the current state of the franchise industry as well. National franchise lawyer Jeffrey M. Goldstein shares his thoughts:

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A bill titled the “American Franchise Act” is currently pending before the U.S. House of Representatives. Introduced by a bipartisan group of legislators, the bill is intended “[t]o preserve the franchise business model” by codifying the joint employer standard established by the National Labor Relations Board (NLRB) in 2020. Learn more from national franchisee lawyer Jeffrey M. Goldstein:

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The U.S. Small Business Administration (SBA) reinstated its Franchise Directory earlier this year. Its decision to discontinue the Franchise Directory in 2023 as part of a broader effort to streamline its lending programs was largely decried within the franchise industry, with the International Franchise Association (IFA) noting at the time that about 20 percent of all SBA loans go to franchisees, and that franchising had played a significant role in the United States’ post-pandemic economic recovery. Now that the SBA Franchise Directory is back, what do you need to know? National franchise attorney Jeffrey M. Goldstein explains.

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Author Victor P. Goldberg, Columbia Law School Document Type Article Publication Date 1979   SUMMARY OF HOW THE ARTICLE’S ECONOMIC THOUGHTS IMPACT ON FRANCHISING Insights and Discussions on Franchising, Franchisees, and Franchisors: Roles, Relationships, and Legal/Economic Implications Definitions and Nature of the Franchise Relationship Franchising encompasses various retail arrangements, including “business format franchising,” where a trademarked product, service, or method is licensed to a franchisee (e.g., fast food, muffler shops, convenience stores), and “traditional franchising,” which involves specialized retail services (e.g., automobile dealerships, service stations) where dealers often specialize in a single brand’s products, making the franchisee’s business identity heavily reliant on the franchisor relationship. Conversely, “franchise” agreements can also be extremely casual, resembling routine retailer-manufacturer transactions, such that the label “franchise agreement” may be attached to loose or minor arrangements. The franchise relationship is best understood as a long-term “relational exchange,” not as a discrete, one-off transaction; it involves parties entering an ongoing arrangement, partially insulated from market forces, with behavior within the relationship (not just market outcomes) being a key concern. Roles and Interests of Franchisors and Franchisees The franchisor typically designs the franchise agreement and presents it to franchisees, often on a take-it-or-leave-it basis. While franchisee interests may be considered to some extent, the franchisee plays a relatively passive role in the formation and structuring process. Franchisees invest in inventories, signage, promotion, and otherwise become closely tied to the franchisor’s business, sometimes making relationship-specific investments that lack value outside the franchise arrangement. Franchisors provide initial and ongoing training, […]

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Credible Commitments: Using Hostages to Support Exchange Oliver E. Williamson The American Economic Review Vol. 73, No. 4 (Sep., 1983)   Another Entry in the Goldstein Law Firm’s Series Entitled: Summaries of Great Academic Articles on Law, Economics, and Philosophy in Franchising, Distribution and Life In franchising, credible commitments are created to address the risk of opportunism—e.g., franchisees may be tempted to reduce quality after signing the contract, exploiting the overall reputation of the franchise system. Economic Theories of Credible Commitments and Their Applicability in Distribution and Franchise Contexts General Theory of Credible Commitments Williamson distinguishes between credible commitments and credible threats, both of which are relevant primarily in the context of irreversible, specialized investments. Credible commitments are reciprocal actions undertaken to support alliances and promote exchange, serving efficiency by safeguarding relationships where opportunism and incomplete contracting may undermine cooperation. Such commitments are especially vital when parties make transaction-specific investments that are difficult to protect through simple contractual or legal mechanisms alone. The study of credible commitments otherwise receives less attention than credible threats, largely due to the assumption that courts efficiently enforce contracts—an assumption Williamson challenges. Williamson emphasizes “private ordering,” where parties to exchange relationships develop their own governance structures (such as self-enforcing agreements, use of “hostages,” and bonding mechanisms) to manage the risk that one party will act opportunistically after the other commits irreversible assets. The creation of credible commitments is central to such governance structures, as it deters actions contrary to the mutual interest and substitutes for, […]

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Hiring an experienced franchise lawyer to conduct a franchise business review gives you an opportunity to ensure that you are making an informed decision about your investment. While you certainly aren’t required to hire a franchise lawyer to review your franchise opportunity, there are several important reasons to do so. 

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Pasture Gate Holdings, Inc. v. Gruzd, Bus. Franchise Guide (CCH) ¶ 17,731 (S.D. Cal. May 19, 2025). Case Summary In the case of Pasture Gate Holdings, Inc. v. Nadia Gruzd, the U.S. District Court for the Southern District of California addressed claims brought by Pasture Gate Holdings, Inc. (“Plaintiff”) against Nadia Gruzd (“Defendant”) concerning alleged violations of the California Franchise Investment Law (CFIL) and the California Unfair Competition Law (UCL). The Plaintiff, a North Carolina corporation, purchased a franchise business from Gruzd, who was associated with the “AllMed Search” brand, a healthcare recruiting service. The Plaintiff alleged that Gruzd provided incomplete and misleading information in the Franchise Disclosure Document (FDD) and made unlawful financial performance representations, which induced the Plaintiff to purchase the franchise. Court Decision The court denied Gruzd’s motion to dismiss the Plaintiff’s claims. The court found that the Plaintiff had adequately pleaded claims under both the CFIL and UCL, and that the Defendant’s objections, including the statute of limitations defense, were not sufficient to warrant dismissal at this stage. Legal Analysis CFIL Claims The Plaintiff’s CFIL claims were based on alleged statutory violations related to disclosures in the MSC-FDD. The Plaintiff argued that Gruzd failed to disclose the existence of a predecessor entity, Unlimited Med Search Franchise System, Inc. (UMFS), which was relevant under Item 1 of the FDD. The court found that the Plaintiff’s allegations were sufficient to support a reasonable inference that UMFS was a predecessor to MSC, thus supporting the claim of inadequate disclosure. Additionally, the Plaintiff […]

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