Special Considerations for Purchasing a Pet-Related Franchise

Jan 18, 2019 - Blog by |

According to Franchise Direct, the pet franchise industry is growing rapidly. With pet owners spending around $70 billion annually, buying into a pet-related franchise may seem like a smart investment. But, whether you are interested in opening a brick-and-mortar “pet hotel” or retail outlet, operating a mobile pet grooming franchise, or walking dogs in your local neighborhood, there are some important legal factors to consider, and rushing into a franchise opportunity could prove to be a costly mistake. Important Legal Considerations for Purchasing a Pet-Related Franchise Before you buy a pet-related franchise, here are some important legal considerations to keep in mind: 1. Liability to Clients If you will be providing training, walking, grooming, or hospitality services, what are your responsibilities while you have custody of your clients’ pets? What if an animal gets sick while in your care; or, what if one client’s pet attacks another’s? While your franchisor should provide guidance for addressing these types of issues, do not expect your franchisor to assume liability if your franchise gets sued. This is true even if an animal gets sick or injured to your use of franchisor-mandated products or supplies. 2. Liability to Others In a similar vein, what happens if a client’s pet attacks someone else? For example, what if a client’s dog escapes off-leash or you lose control of a dog during a walk, and the dog bites a passer-by? Once again, your franchisor is not going to assume responsibility; so, should you? Are you prepared to […]

Read More

How Much Does It Cost to Buy a Franchise?

Jan 16, 2019 - Blog by |

A recent article on FranchiseDirect.com seeks to answer the question, “How much does it cost to buy a franchise?” by comparing the startup costs for two very different franchise opportunities: a work-from-home travel agency and a 300-plus room high-end hotel. In doing so, it lists the Item 7 estimated initial investment disclosures from two Franchise Disclosure Documents (FDDs), which range from a low-end total of $3,245 to a top-end investment in excess of $64 million. While these may be franchisors’ actual published figures, they represent two different extremes. Most franchisees will need to initially invest amount that is somewhere in the middle, often somewhere roughly in the range of $50,000 to $100,000. Where to Find Information on Franchise Startup Costs When looking for information on franchise startup costs, Item 7 of the FDD is one place to look, but it should not be prospective franchisees’ only source of information. There are a number of reasons why. Most notably: Franchisors’ numbers in Item 7 are “estimates,” and they may or may not be based upon data gathered from franchised and company-owned openings. Startup costs can vary by geographic location. Real estate leases, licenses, permits and other necessities can all vary greatly in cost from one area to the next. The list of itemized expenses in Item 7 may or may not be complete. Franchisors may overlook or omit certain expenditures, or you may need to incur costs that are not common amongst other franchisees. Even franchisors’ high-end estimates will often be […]

Read More

What Do Franchisees Need to Know about “Indemnification”?

Dec 31, 2018 - Blog by |

Although indemnification clauses are ubiquitous in the franchise industry, indemnification is a legal concept that few franchisees, franchisors and even franchise attorneys truly understand. This is unfortunate, because it leads many franchisees to assume legal responsibility for liabilities that are far beyond their control, and it prevents many franchisors from negotiating reasonable concessions that would be no-brainers if they understood the terms of their own franchise agreements. What is Indemnification? So, what is indemnification? In its most basic form, indemnification is the oblation for one party to assume liability for a claim against another party. So, if Joe sues Jane and John has an obligation to indemnify Jane, if Joe wins, John is the one who is ultimately responsible. In a typical franchise agreement, the indemnification clause will look something like this: “Franchisee will fully indemnify and hold harmless Franchisor from and against any and all claims arising out of or relating to the Franchise, whether asserted during the term of the Franchise Agreement or after the Franchise Agreement expires.” This sounds reasonable enough, right? If a customer sues your franchisor for something that you did, doesn’t it make sense for you to be held liable? While a duty to indemnify may make sense in this particular scenario (although, even this may not necessarily be the case), there are plenty of other scenarios where the franchisor should be the one to indemnify. Most Franchise Agreement Indemnification Clauses are Overly Broad While you will be the face of your franchise and, […]

Read More

5 Special Considerations for Purchasing a Senior Care Franchise

Dec 27, 2018 - Blog by |

All franchise opportunities present certain legal issues. From your obligation to pay royalties to the franchisor’s right to terminate your franchise agreement, virtually all aspects of the franchise relationship have legal implications. In certain sectors, the nature of the business can give rise to legal concerns as well. Senior care is one of these sectors. What are Some Potential Legal Risks for Senior Care Franchise Owners? Whether you are considering an in-home care franchise, a medical staffing franchise, a franchise for a skilled nursing facility, or any other type of franchise focused on serving the elderly, it is important to have a clear understanding of the potential legal risks involved. Along with conducting your due diligence and negotiating your franchise agreement, this also means addressing the legal issues associated with: 1. Lease Negotiations If you will be leasing a senior care facility or administrative office space, it will be important to put as much effort into negotiating your lease as you put into negotiating your franchise agreement. Similar to franchise agreements, commercial lease agreements are often heavily one-sided; and, in addition to ensuring that you can use the space as you intend, you will also need to make sure that you have adequate protections so that you can remain in the space throughout the term of your franchise. 2. Hiring and Employment When hiring people who will be caring for seniors or who will have access to seniors’ places of residence, conducting adequate screening and background checks takes on heightened […]

Read More

2018 Year in Review: Insights on the Franchise Industry

Dec 18, 2018 - Blog by |

Each year, we publish numerous articles designed to help prospective and current franchisees gain insight into the franchise buying and ownership processes. 2018 was no exception. Here are 10 of our top articles from throughout the year: Top 10: Franchise News and Insights from 2018 1. Franchise Industry Statistics: Most-Popular Industries and Locations While buying a franchise requires a careful assessment of your personal skills, finances and interests, analyzing trends can also help you make an informed buying decision. We recently took a look at the most-popular franchise industries and the states with the most (and least) franchised businesses. 2. What Is the Universal Franchisee Bill of Rights? In this post for Blue MauMau, we provided our thoughts on the Universal Franchisee Bill of Rights and discussed some key takeaways for new and exiting franchisees. 3. FDDs, Franchise Agreements and Operations Manuals – What Do Prospective Franchisees Need to Know? There are three main legal documents that govern the franchise relationship: The Franchise Disclosure Document (FDD), the franchise agreement and the Operations Manual. In this article, we provide an introduction to each and discuss some of their key implications for franchisees. 4. What Does it Mean if My Franchise Agreement Requires “Mandatory Arbitration”? While arbitration is supposed to provide a level playing field, the reality is that “mandatory arbitration” clauses often heavily favor the franchisor. We explained why in this article from Summer 2018. 5. What Can You Really Hope to Negotiate in Your Franchise Agreement? When buying a franchise, […]

Read More

Do I Really Have to Sign a New Franchise Agreement in Order to Renew?

Dec 11, 2018 - Blog by |

All franchise agreements contain conditions of renewal. These are provisions that require the franchisee to satisfy certain requirements in order to extend its franchise rights beyond the end of the initial term. Common renewal conditions include an obligation to cure any outstanding defaults (i.e. pay any past-due advertising fund fees or royalties), an obligation to update to then-current system standards and an obligation to sign the franchisor’s then-current franchise agreement. For many franchisees, this last condition will be the only sticking point. They will be up-to-date on all aspects of their franchise, and they will be a solid profit center for the franchisor. But, in order to renew, they will still be required to sign a new agreement, which could have terms that are substantially different from those that currently govern their franchise. The Risks of Signing Your Franchisor’s “Then-Current” Franchise Agreement Why does this matter? Among other potential concerns, being forced to sign a new franchise agreement could mean: Agreeing to a higher royalty percentage or new royalty terms (i.e. a “fixed” or minimum royalty). Agreeing to a higher advertising fund contribution percentage. Agreeing to new requirements regarding suppliers, system standards and mandatory upgrades. Agreeing to new, less-favorable terms with regard to indemnification and dispute resolution. Agreeing to grant additional termination rights to the franchisor and to face additional obligations in the event of termination. Agreeing to even stricter conditions for subsequent renewals. Losing the benefit of terms that you negotiated in your original franchise agreement. With these potential […]

Read More

“Show Me Where I Said That.” Oral Promises and Franchisees’ Rights in Litigation

Dec 6, 2018 - Blog by |

Oral promises can be legally enforced, but good luck getting your franchisor to agree to something that it did not put in writing. Unfortunately, from the initial sales process through the waning moments of a franchisor-franchisee relationship, it is not unusual for franchisors and their representatives to say things knowing that they will be difficult (if not impossible) to ever prove in court. With this in mind, as a franchisee, it is important to get into the habit of getting things in writing. From negotiating changes to your franchise agreement (instead of relying on a sales representative who says, “Don’t worry about that, I’ve never seen us actually use that clause against a franchisee.”) to communicating via email when you have issues down the road, documentation can be your best friend. Follow up when you do not get answers, send confirmatory emails (i.e. “To confirm what we just discussed . . .”) and keep copies of everything you get in writing. Litigating Disputes Based on Oral Promises But, let’s suppose you are past the point of no return. Let’s suppose that you bought a franchise based upon oral representations that proved to be false, or that you are now facing potential termination due to your reliance on an oral promise – both of which are common scenarios. What legal options do you have available? 1. Proving the Oral Promise One option is to try to prove the oral promise. While this can be difficult, it is not always impossible. For […]

Read More

Is Amazon a Threat to Franchisees?

Nov 30, 2018 - Blog by |

Amazon has been taking business away from brick-and-mortar stores for years. Despite promoting the benefits of selling through its marketplace to small businesses, it is clear that Amazon (along with other online shopping platforms that offer fast shipping and easy returns) is increasingly becoming a threat to retail businesses that rely on a steady stream of customers to maintain profitability. But, even for franchisees who do not have to compete with Amazon for customers, there is another potential risk as well—particularly for those located near HQ2 and Amazon’s various shipping and fulfillment centers around the country: the risk of losing out on quality employees. According to a recent article on franchise news website BlueMauMau.org: “Mark Zandi, chief economist of Moody’s Analytics, pointed out in a conference call . . . that Amazon announced it was increasing its entry level wages to $15 per hour, which is more than double the federal minimum wage. ‘It is indicative of how tight this labor market is,’ said Zandi. “He anticipates that this will put increasing pressure on employers that employ lower skilled workers to also raise their wages. ‘I fully anticipate wage growth accelerating as we move to 2019.’” As Amazon and other companies start offering higher wages even at entry-level positions, franchisees who find themselves struggling to make payroll may face even greater struggles in the near future. Are Franchisees Hiring? Will They Be Hiring in 2019? However, even as wages trend upward (many states have minimum wages increases set to take […]

Read More

NLRB Provides Franchise-Specific Guidance in Latest Update on Joint Employer Standard

Nov 23, 2018 - Blog by |

The legal standard for determining when an entity may be considered a “joint employer” of another entity’s employees has been in a state of flux since the National Labor Relations Board’s (NLRB) Browning-Ferris ruling in 2015. While the NLRB reversed the Browning-Ferris decision late last year, the uncertainty over the past few years left a host of lingering questions, particularly in the world of franchising. To address these questions, the NLRB has been working on a set of regulations to help clarify when the joint employer standard should be applied. It recently released a first draft of its proposed regulations. The Joint Employer Standard in Franchising The proposed regulations start by defining what constitutes a “joint employer” (a definition that is notably absent from the current regulatory framework). As proposed: “[A]n employer may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction . . . [and] a putative joint employer must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.” However, with regard to franchising, the NLRB has taken the position that, “[f]ranchisors generally exercise some operational control over their franchisees, which renders the relationship subject to application of the [NLRB’s] joint-employer standard.” Additionally, as noted in a recent article on BlueMauMau.org discussing the draft rulemaking, the […]

Read More

What Can You Really Hope to Negotiate in Your Franchise Agreement?

Nov 16, 2018 - Blog by |

You have decided to buy a franchise. All that is left is to sign the franchise agreement and pay your initial franchise fee, and then you will officially own your own business. So, is it worth it to try to negotiate? Or, is it safe to assume that the franchise agreement is being offered on a “take it or leave it” basis? Unfortunately, over the past several decades, franchisors have honed the art of drafting one-sided franchise agreements. At the same time, franchise salespeople have come up with myriad ways to convince franchise candidates that negotiating is unnecessary. The truth is, if you are thinking about buying a franchise, it is strongly in your best interests to have the franchise agreement reviewed by an attorney, and most quality franchisors will expect you to request certain changes. Requesting Reasonable Modifications to Your Franchise Agreement So, the question then becomes, “What changes can I reasonably expect my franchisor to accept?” While there is no magic formula and nothing is ever guaranteed, some of the franchise agreement provisions that are most likely to be on the table include: 1. Initial Term Whether the initial term of the franchise agreement is too short or too long, this is a provision of the franchise agreement that often merits careful consideration. You want to make sure that you have enough time to recoup your investment, but you also want to avoid being locked in for too long if the business simply isn’t profitable. If you can […]

Read More

Page 3 of 1612345...10...Last »
Esteemed Lawyers of America Logo

Esteemed Law Firm Complex Litigation

Global Law Experts Logo

Recommended Firm in Franchise Litigation

Who's Who Attorney Logo

Top Attorney USA – Litigation

Avvo Franchise Lawyer Symbol

Superior Attorney in Franchising

Avvo Franchise Lawyer Symbol

Superior Attorney in Antitrust

Finance Monthly Global Award Winner Logo

Franchise Law Firm of the Year

Lead Counsel logo

Chosen Law Firm for Commercial Litigation

BBB of Washington DC

A+ Rated

Washington DC Chamber of Commerce

Verified Member

Lawyers of Distinction logo

Franchise Law Firm of the Year

ISSUU

Best Law Firm for Franchise Disputes in 2017

Law Awards Finanace Monthly

Franchise Law Firm of the Year - 2017

Top Franchise Litigator for Franchisees and Dealers

Top Franchise Litigator for Franchisees and Dealers

2017 Finance Monthly Award

2017 Finance Monthly Award

ACQ5 LAW AWARDS 2018

Franchise Law Firm
of the Year
ACQ5 LAW AWARDS 2018

ACQ5 LAW AWARDS 2019

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
of the Year
in New York – 2019

Finance Monthly Law Awards - 2018

Finance Monthly Law Awards - 2018

Franchise Law Firm of the Year

Franchise Law Firm
of the Year
Global Awards 2018

Contact Us

Goldstein Law Firm, PLLC

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

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

Free Consultation

Free Consultation