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 often large corporate law firms with hundreds or even thousands of attorneys serving major corporate clients across many different industries. They make no secret about the fact that they represent franchisors and corporate interests. In many respects, there is something refreshingly straightforward about this approach because everyone understands where the firm’s loyalties lie. Franchisees may disagree with the positions these firms advocate, but at least there is transparency regarding the firm’s client base and objectives.
Third, there are firms that market themselves heavily to franchisees while simultaneously representing franchisors in other matters. Some prominently advertise their franchisee work, including some franchisee associations, while giving little attention to the consequences of their franchisor representations. You can hear them sheepishly stating: “I represent only the good franchisors.” Franchisees who hire such firms are often unaware that the same lawyers who are asking for their business may be advocating on behalf of franchisors in other cases. While these firms may insist there is no legal conflict, many franchisees would view the information as important when deciding whom to retain.
The question franchisees should ask is simple: Does it matter? At first glance, many lawyers would answer that question with a confident “no.” They would point out that professional responsibility rules permit lawyers to represent different clients in different matters, provided the legal requirements governing conflicts are satisfied. But that response focuses on ethics rules rather than on the practical realities of franchise litigation and the long-term consequences of precedent.
I believe it matters, and I believe it matters substantially. The reason has little to do with whether a lawyer has complied with technical conflict-of-interest requirements. Instead, it concerns the nature of franchise litigation itself and the manner in which legal doctrines develop over time. Franchise litigation is not simply a sequence of isolated disputes between unrelated parties. It is an ongoing struggle over a relatively small group of recurring legal principles that often determine the balance of power between franchisors and franchisees.
Most franchise litigation revolves around a limited number of legal issues that appear repeatedly in courtrooms across the country. Lawyers regularly litigate disputes involving good faith and fair dealing, termination rights, renewal rights, system modifications, encroachment, disclosure obligations, fraud claims, integration clauses, releases, damages, and statutory protections. Although the names of the parties may change, the legal questions remain remarkably consistent. Because the same issues arise over and over again, each court decision has consequences extending far beyond the immediate dispute before the court.
Every time one of these issues is litigated, courts are shaping the rules that will apply in future cases. A decision issued today may become binding authority tomorrow. Even if a decision is not binding outside a particular jurisdiction, it can still become persuasive authority that influences judges elsewhere. Thus, franchise litigation affects not only current litigants but also future franchisees, future franchisors, and future disputes that have not yet arisen.
This is why franchise litigation is different from what many people imagine. The objective is not merely to win one case for one client. Lawyers are also participating in the development of legal doctrine and helping determine how courts will interpret franchise agreements in the future. The arguments advanced today often become the legal principles that shape the industry for years or even decades.
Many lawyers who represent both franchisees and franchisors will correctly note that they are not violating any ethical rule. From a technical standpoint, they may be absolutely correct. The professional conduct rules were not designed to prohibit every situation in which future interests might diverge. Their purpose is to regulate legal ethics, not to measure philosophical alignment or long-term policy consequences.
But that observation misses the central issue. The question is not whether a lawyer can ethically represent different clients in different matters. The question is whether franchisees should care when selecting counsel. Put differently, should a franchisee want a lawyer whose professional efforts sometimes strengthen legal doctrines that favor franchisors and sometimes strengthen doctrines that favor franchisees?
Imagine a lawyer who spends months, or even years, defending a franchisor’s position that integration clauses should bar fraud claims arising from pre-sale representations. After extensive briefing and argument, the lawyer persuades an appellate court to adopt that position. The ruling is celebrated by franchisors because it significantly narrows the circumstances under which franchisees can bring fraud claims. The decision then becomes part of the legal landscape and is cited repeatedly in future litigation.
Now imagine that the same lawyer later represents a franchisee in another case. The lawyer may genuinely advocate zealously for the franchisee. However, that lawyer is now confronting a legal doctrine that he or she previously helped establish. In a very real sense, the franchisee may be attempting to overcome precedent that the lawyer played a role in creating.
No ethics rule necessarily forbids that situation. Nevertheless, many franchisees would understandably wonder whether the lawyer’s long-term litigation efforts have advanced franchisee interests or weakened them. That concern is not rooted in personal criticism. It is rooted in an understanding of how legal precedent works and how legal rights evolve over time.
Lawyers do not merely represent clients; they help shape the law itself. Every appellate brief, every trial court ruling, and every successful legal theory contributes to an evolving framework that governs future disputes. This reality is particularly important in franchise law because the same recurring issues appear repeatedly throughout the industry. Legal victories rarely remain confined to the original case in which they were achieved.
Consider the history of encroachment disputes. For decades, franchisees have argued that franchisors should not be allowed to place competing units so close to existing locations that the original franchisees suffer devastating economic harm. Franchisors have frequently responded that the franchise agreement grants no exclusive territory and therefore permits such expansion. Courts have reached different conclusions depending on the contractual language, the facts presented, and the governing state law. Each resulting opinion has been carefully studied and repeatedly cited by lawyers nationwide.
The significance of those decisions extends far beyond the original litigants. A favorable franchisor ruling on encroachment can become a blueprint for future franchisor defenses. A favorable franchisee ruling can become a foundation for future franchisee claims. Every decision adds another brick to the legal structure upon which future cases will be built.
The same dynamic exists in disputes involving the implied covenant of good faith and fair dealing. Franchisees often argue that franchisors should exercise discretionary powers reasonably and fairly. Franchisors frequently contend that courts should enforce agreements as written and refrain from imposing additional obligations. The resulting judicial decisions influence termination disputes, renewals, pricing practices, supplier relationships, and operational requirements.
A narrow interpretation of good faith often benefits franchisors. A broader interpretation frequently provides greater protection to franchisees. Lawyers litigating these issues are therefore doing more than resolving present disputes; they are shaping future franchise relationships. That reality makes it difficult to view each case as an isolated event disconnected from all others.
Fraud disclaimer cases provide another example. Franchisees commonly allege that they relied upon representations made during the sales process. Franchisors often argue that written disclaimer provisions and integration clauses defeat those claims. Courts across the country have spent years wrestling with where to draw the line between contractual certainty and fraud prevention.
The outcomes of these cases influence thousands of transactions. A single appellate ruling may affect how franchise disclosure documents are drafted, how sales presentations are conducted, and how future lawsuits are litigated. Lawyers participating in these cases are helping establish ground rules for the franchise industry. Those rules do not disappear once the original lawsuit concludes.
Most franchisees instinctively understand this issue because they are business owners. They evaluate incentives, loyalties, and alignment every day. They recognize that people and organizations tend to advance the interests they regularly serve. Consequently, many franchisees view dual representation of franchisors and franchisees through a practical rather than a purely ethical lens.
If a consultant worked extensively for franchisors and franchisees, most franchisees would want to know that fact. If a lobbying organization represented both franchisors and franchisees, most franchisees would consider that information relevant. The same logic applies to litigation counsel. Franchisees often want a clear understanding of where a firm’s time, energy, and influence are being invested.
This concern becomes particularly significant when firms market themselves as franchisee advocates without prominently disclosing their franchisor representations. Many franchisees naturally assume that a firm advertising heavily to franchisees is devoted primarily, if not exclusively, to franchisee interests. That assumption may be inaccurate. The reality may be that the firm simultaneously earns revenue advocating positions that benefit franchisors elsewhere.
For that reason, franchisees should ask direct questions before retaining counsel. They should inquire whether the firm currently represents franchisors, whether it has represented franchisors in recent years, and what percentage of its litigation practice involves each side. They should ask whether the firm has advanced legal positions for franchisors that could affect franchisees generally. They should also ask whether the firm seeks franchisor clients as part of its ongoing business strategy.
These questions are not accusations. They are forms of due diligence. Sophisticated businesspeople routinely investigate relationships, incentives, and competing interests before making important decisions. Choosing litigation counsel should be no different, particularly when a lawsuit may determine the future of a business that took years to build.
Ultimately, the strongest argument for exclusive franchisee representation is not rooted in legal ethics. It is rooted in institutional alignment. Every lawyer who litigates franchise cases plays a role in shaping franchise law. Over time, those efforts either expand franchisee rights, restrict franchisee rights, strengthen franchisor authority, or limit franchisor authority.
Lawyers who represent both sides necessarily contribute to both projects. They may do so honorably, competently, and in full compliance with professional rules. Nonetheless, their litigation efforts are divided between advancing franchisee positions and advancing franchisor positions. By contrast, lawyers who represent franchisees exclusively devote all of their professional efforts to developing legal doctrines that benefit franchisees and dealers.
Reasonable people can disagree about the significance of that distinction. Some may conclude that skill and experience are the only factors that matter. Others may conclude that long-term alignment of interests is equally important. What cannot fairly be disputed, however, is that franchisees are entitled to know where their lawyers stand and whom they regularly serve.
When livelihoods, investments, and businesses are on the line, transparency matters. Franchisees should have sufficient information to determine whether the lawyer they hire spends all of his or her time advancing franchisee interests or whether that effort is divided between franchisees and franchisors. That is not a question of legal ethics. It is a question of loyalty, alignment, transparency, and the future development of franchise law itself.
Only two boutique law firms in the United States truthfully and exclusively represent franchisees and dealers, without also representing franchisors or manufacturers. Some claim there is a third, but that firm discreetly represents franchisors and does not routinely disclose it. Jeffrey M. Goldstein and the Goldstein Law Firm, nationally recognized as one of the best franchise law firms for franchisees, bring a strong anti-corporate litigation focus and a deep understanding of the franchise industry’s inherent power imbalance.
