Franchise Articles

Franchisees who are interested in cashing out must strictly comply with their franchise agreements both before and during the transfer process. Franchise agreements often include several conditions on transfer, including securing the franchisor’s approval, paying a transfer fee, and complying with the franchisor’s right of first refusal.

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While owning a franchise can be profitable, it is debatable that franchise ownership has made “countless Americans rich,” as claimed in a recent article published by The Economist. This also ignores data suggesting that the average single-unit franchise owner earns less than $100,000 annually, and that for new owners, the average is closer to $50,000. Additionally, around one in ten franchises fail completely within the first two years.

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Many experienced franchisees say they wish they had known more about the unique challenges of franchise ownership before moving forward. Not having a clear understanding of the costs involved is a common lament as well. Some also say they expected to take a more hands-off approach than their franchises ultimately required.

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Last month, we published an article outlining seven reasons franchisees should be cautious about using artificial intelligence (AI) when researching franchise opportunities. In that article, franchise attorney Jeffrey M. Goldstein highlighted some of the key pitfalls of using AI for research purposes, particularly when researching anything with significant financial or legal implications (or both).

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You received a franchise termination notice. Maybe it was expected, or maybe it wasn’t—but now you are facing a high-risk situation that you never expected when you signed your franchise agreement. In this situation, what can (and should) you do? Equally important, what should you avoid doing, and what (if anything) can a franchise lawyer do to help?

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Abstract This article explains briefly and informally how a compact deterrence framework organizes conduct in franchising and analogous dealership channels. p·F ≥ G states that a deviation is unattractive when the expected penalty (probability times sanction) meets or exceeds the private gain, following Becker (1968). The analysis combines operational instrumentation, contractual fee architecture, and event‑triggered remedies into one explanatory model that travels cleanly between the outlet and the corporate center. Its practical value is less about punishment than about design: when evidence is a by‑product of normal operations and outcomes trigger on observable events, participants coordinate on compliance with fewer disputes. Although the literature often foregrounds franchisee non‑compliance, franchisor opportunism is under‑represented in published work and, in practice, is both more rampant and more difficult to detect and prove because it is embedded in policy decisions and paper processes. The article therefore places special weight on headquarters transparency and self‑executing remedies to restore symmetry in detectability and sanctions. By reframing familiar conflicts as tractable choices over gain (G), detection (p), and sanction (F), the framework converts diffuse debates into measurable decisions. Introduction This article offers a third‑party account of franchise behavior that uses an expected‑value inequality, rather than moral exhortation, to explain why deviations rise or fall. Actors compare the private gain from deviating G with the expected penalty p·F, and when the latter meets or exceeds the former, the shortcut no longer pays in expectation (Becker, 1968). While most case discussions dwell on unit‑level issues, many of the largest, […]

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Franchise attorney Jeffrey M. Goldstein, founder of Goldstein Law Firm, has once again been named to the Franchise Times’ list of U.S. Legal Eagles. Published annually, the U.S. Legal Eagles list highlights the nation’s “top franchise attorneys,” as selected through the publication’s formal nomination process.

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While it is becoming increasingly common to use ChatGPT, Gemini, Perplexity, and other artificial intelligence (AI) platforms to conduct research rather than searching online, this approach poses several risks. This is especially true for prospective franchisees. As a prospective franchisee, it is critical to do your due diligence, and there are multiple issues with AI that make it unfit for this purpose. Keep reading to learn more from franchisee lawyer Jeffrey M. Goldstein.

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Most franchise agreements include provisions requiring franchisees to pursue mediation or arbitration (or both) rather than taking their franchisors to court. As a franchisee, understanding your legal options is important. So, if you need to hold your franchisor accountable, what do you need to know? Here are some key insights from national franchise lawyer Jeffrey M. Goldstein.

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The International Franchise Association (IFA) recently published a report titled, The Value of Franchising. As the IFA explains, the report reflects the results of a survey of nearly 3,000 franchisees as well as an “economic analysis comparing franchises with non-franchise businesses” conducted by Oxford Economics. Here, national franchisee attorney Jeffrey M. Goldstein shares his thoughts on the report’s conclusions.

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