If You Plan To Invest In A Franchise Or Distribution Agreement, Talk To Us First
Many potential franchisees make the mistake of not retaining counsel because the franchisor tells them that the agreement is a “take-it-or-leave-it” agreement. As noted above, significant dangers lurk throughout almost every franchise or distribution agreement drafted by franchisors, manufacturers or suppliers. Without seeking out expert franchise law expertise to discover and explain these dangers before you sign, you are increasing your downside financial risk exponentially. Don’t make the mistake of many bankrupted former franchisees and dealers who thought they could themselves read and understand complicated franchise and distribution agreements. Call Jeff Goldstein at the Goldstein Law Firm at 202-293-3947 to discuss the franchise business review services.
Consult With A Franchise Agreement Lawyer For A Review Of Franchise And Dealership Agreements
Regardless of a dealer or franchisee’s ability to obtain modifications in a proposed supplier or franchise agreement through negotiations, reviewing the distribution or franchise agreement is nevertheless crucial to a potential franchisee or dealer in order to gain a vital working knowledge of the legal and real-world pitfalls in the proposed agreement. Frequently overlooked or misunderstood provisions or gaps in distribution and franchise agreements are used lawfully by franchisors, suppliers and manufacturers to terminate franchise and distribution agreements. Damages from failing to fully understand and negotiate your distribution or franchise agreement are not limited solely to termination of the franchise or distribution agreement; frequently, following termination, franchisors and suppliers seek to enforce post-term restrictive covenants that will prevent former franchisees and dealers from continuing to engage in any related businesses after a termination.
Having practiced franchise law for over thirty years in almost every major franchise system and in every major state, it is Jeff Goldstein’s view that many franchisees and dealers are unaware of the legal and practical significance of many of the provisions in their dealer and franchise agreements. This is the case even after franchisees and dealers have operated for many years as part of the distribution or franchise system. Without possessing this fundamental working knowledge of the legal pitfalls and business risks in their proposed distribution and franchise agreements before they sign a franchise or distribution agreement, it is exceedingly difficult, if not almost impossible, for franchisees and dealers to meaningfully compare the provisions in one franchise or dealer agreement with those in others that are being offered by competing franchisors in the marketplace. Goldstein Law Firm freelance agreement attorneys provide several programs described directly below regarding franchise agreement reviews and negotiations. These programs frequently are available on a fixed-fee basis where you will not have to worry about hourly and billable charges.
1. Fundamental Review of Franchise/Dealership Agreements /FDD
Under this program, Goldstein Law Firm attorneys review, in a general fashion, your proposed franchise or dealership agreement, as well the relevant associated Franchise Disclosure Document (“FDD”), before you sign on the dotted line. As part of this review, Jeff Goldstein or another franchise attorney participates in one lengthy conference call to discuss the firm’s cursory views of the proposed franchise or distribution agreement and answer your general questions.
This program is focused on your getting a ‘gut instinct’ from an expert franchise lawyer as to the most ominous, or deceptively benign, aspects of the proposed distribution or franchise agreement. This program does not include potential negotiations with the franchisor or supplier, which are included in a more comprehensive review program discussed below. This program is most beneficial to those who are contemplating purchasing a franchise, but who are still “on the fence.”
2. Detailed Review of Franchise/Dealership Agreements/FDD
This program involves a very thorough and detailed analysis of your proposed franchise or dealer agreement and the FDD. This program is far more comprehensive than the Fundamental Review above. It also includes the identification of important franchise-specific statutes or laws in your state that might bear on the proposed franchise agreement or relationship. Even an isolated word or term in one of these agreements has the real potential to determine the success or failure of your business.
This program does not include negotiations, which are included in the other program below. As part of this review, this program provides for two conference calls to discuss the firm’s views and answer your general questions.
This program is most beneficial to those who are pretty certain that they will go forward with their franchise or dealer purchase, but who do not wish an attorney to attempt to negotiate different or additional points in their franchise agreements.
3. Detailed Comprehensive Review and Negotiation of Franchise/Dealership Agreements/FDD
Under this program, Goldstein Law attorneys provide the same detailed review and analysis as in the Detailed Review of Franchise/Dealership Agreements/FDD Program above, in addition to attempting to negotiate specific proposed franchise and dealer agreement modifications with the potential franchisor, supplier or manufacturer. Again, as noted above, there is no guarantee that a franchisor will always agree to negotiate over certain provisions in its franchise or distribution agreements, but the attorneys at Goldstein Law have been incredibly successful in obtaining many beneficial agreement changes, modifications, and deletions during their more than thirty years of practice in distribution and franchise law.
In those cases in which either you or your representative have been successful in achieving modifications, deletions or additions to a franchise or distribution agreement, it is crucial to have an attorney review the proposed changes to make sure that they in fact accurately reflect your understanding of these adjustments. In this regard, it is not an uncommon occurrence for the supplier, manufacturer or franchisor to draft up an addendum allegedly incorporating agreed-upon modifications or additions which, under expert legal scrutiny, would thereafter be unenforceable by the franchisee or dealer in a future dispute.