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If you received a Franchise Disclosure Document (FDD) that includes a Financial Performance Representation (FPR), you should review the FPR and the franchisor’s disclaimers in detail. While FPRs are subject to strict disclosure rules, franchisors have significant leeway in what they choose to disclose, and they often use broad disclaimers to minimize their liability exposure. You should have the FPR (and the entire FDD) reviewed by an experienced franchise lawyer as well.

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As a franchisee, you have the right to hold your franchisor to its end of the bargain. As a result, if your franchisor overpromised and underdelivered, you may have grounds to take legal action. In this scenario, your legal options depend on the specific circumstances at hand, and you will want to engage a franchise law firm to help you make informed and strategic decisions.

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While franchisees can file complaints with the Federal Trade Commission (FTC), the FTC only has limited authority to hold franchisors accountable for disclosure violations. As a result, franchisees who have complaints against their franchisors should hire an experienced franchisee attorney to help them assert their legal rights. Depending on the circumstances, this will most likely involve pursuing mediation or arbitration—though franchisees can also take their claims to court in some cases.

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If you have been misled by your franchisor, you could have a claim for fraud. In this scenario, it will be critical to ensure you make informed decisions, and you will want to promptly discuss your legal options with an experienced franchise attorney. Jeffrey M. Goldstein, founding attorney of Goldstein Law Firm, represents franchisees nationwide.

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As a prospective franchisee, there are lots of red flags to be aware of during the due diligence process. These include incomplete FDD disclosures, evasiveness from the franchisor’s representatives, and franchisees who are hesitant to talk about their experience, among others. By working with an experienced franchisee attorney during your due diligence, you can spot these red flags before you make an uninformed buying decision.

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In Walk Good Bahamas, Ltd. v. Alpargatas USA, Inc., the United States District Court for the Central District of California addressed whether a distributor could maintain breach-of-contract and good-faith claims after an express written exclusive distributorship agreement expired by its own terms. The court held that when parties continue to perform under a contractual relationship after expiration, an implied-in-fact contract may arise, especially where the conduct extends beyond mere acceptance of orders to include approval of business plans, receipt of confidential data, and continued representation as an exclusive distributor. The court denied dismissal of the breach-of-contract and breach-of-implied-covenant claims, finding that the distributor plausibly alleged a new agreement through post-expiration conduct. However, the court dismissed with prejudice the distributor’s claims for breach of fiduciary duty, fraudulent inducement, and tortious interference, holding that a standard exclusive distributorship does not create a fiduciary relationship, that alleged concealment of potential breaches does not support fraud, and that a party cannot transmute its own breach into tortious interference with third-party contracts. This decision may underscore the importance of clear post-expiration conduct and contractual language in distributorship relationships and may provide guidance on the boundaries between contract and tort remedies in commercial relationships. Case Identification and Parties This case, Walk Good Bahamas, Ltd. v. Alpargatas USA, Inc., 2026 U.S. Dist. LEXIS 168695, was decided on July 28, 2026, by the United States District Court for the Central District of California, with Judge Josephine L. Staton presiding. The plaintiff was Walk Good Bahamas, Ltd., a company […]

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When franchisees begin searching for litigation counsel, they often assume that all franchise lawyers occupy roughly the same position in the legal marketplace. That assumption is understandable because many firms use similar language, emphasize their franchise experience, and describe themselves as knowledgeable advocates in franchise disputes. Yet beneath those similar marketing messages are dramatically different business models, client relationships, and professional incentives. The distinction matters because the interests that a lawyer advances over the course of a career frequently shape the legal environment in which future franchisees must operate. In reality, franchise litigation lawyers generally fall into the three distinct categories discussed below. Understanding those categories is essential for any franchisee attempting to make an informed decision about legal representation. The differences are not merely academic, nor are they limited to firm size, geography, or years of experience. Rather, they involve a fundamental question about whose interests the lawyer is advancing when important legal issues arise. First, there are the firms that represent franchisees and dealers exclusively. These firms devote their litigation practices to advancing franchisee and dealer interests and do not represent franchisors. Their professional energies, legal arguments, appellate strategies, and long-term objectives are aligned with one side of the franchise relationship. Every significant precedent they help create is developed from the perspective of expanding, protecting, or preserving the rights of franchisees and dealers. There are only two national litigation firms in the country that truthfully represent only franchisees. Second, there are firms that openly represent franchisors. These are […]

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Franchisors are supposed to disclose the “estimated initial investment” required to open for business in Item 7 of the Franchise Disclosure Document (FDD). But franchisors’ estimates aren’t always as accurate as they should be, and prospective franchisees can receive a very misleading picture of how much it costs to open in some cases. This makes it critical for prospective franchisees to independently verify their startup costs during the due diligence process.

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“Semi-passive” franchise ownership has become an increasingly popular goal in recent years. Semi-passive owners, or “executive franchisees,” make high-level decisions but do not personally manage their franchise’s day-to-day operations. While semi-passive franchise ownership offers flexibility and time for other endeavors, pursuing this option requires careful consideration. As a result, prospective franchisees who are considering semi-passive ownership should consult with an experienced franchisee attorney who can help them make informed decisions.

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As a franchisee, your territory is among the most valuable aspects of your franchise. As a result, protecting your territory is extremely important. If your franchisor or another franchisee is encroaching on your protected or exclusive territory, you should consult with an experienced franchise attorney about your legal options promptly.

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