The IFA Legal Symposium is an annual event that brings together franchise lawyers from across the United States and around the world to discuss recent legal developments in the world of franchising. This year’s Symposium is being held virtually, and many of the topics that will be covered during the event are signs of the times as well.
But, not all of the topics covered in this year’s breakout sessions pertain to COVID-19. Here is a look at some of the topics that are on the table and why they matter to prospective and current franchisees:
Diversity and Inclusion in Franchising
One of the breakout sessions scheduled for the 2021 IFA Legal Symposium focuses on the question: Is there structural discrimination in franchising? The discussion is being spurred by a recent wave of lawsuits against franchisors alleging discriminatory practices. While franchisees are not subject to the same anti-discrimination protections as employees, franchisees still have clear legal rights, and franchisors that overlook, ignore, or knowingly violate these rights deserve to be held accountable.
Private Equity in Franchising
Private equity has played an increased role in franchising in recent years—with private equity funds serving as financing sources for both franchisors and franchisees. As a franchisee, seeking a private equity investment can provide access to the financing needed to open multiple locations; but, of course, there are more considerations involved. For franchisees who are considering private equity, it is important to have a clear understanding of both the potential rewards and the potential risks.
Franchise Agreement Risks Related to COVID-19
The COVID-19 pandemic has forced many franchise lawyers to think carefully about contract provisions that they have traditionally given only cursory consideration. For example, while force majeure clauses were previously considered “boilerplate” provisions that were almost certainly never to apply, this is no longer the case. With the perspective afforded by the pandemic, negotiating these types of provisions is now a key concern for both franchisors and franchisees.
Re-Opening a Franchise During the Pandemic
With four FDA-approved vaccines now in rapid deployment in the United States, we are starting to see some light at the end of the tunnel. As a result, many franchisees are now in the process of working toward resuming normal (or mostly normal) operations. In doing so, however, franchisees must be careful to not only remain compliant with the law but also to remain compliant with the terms of their franchise agreements and operations manuals.
Franchise Terminations Related to COVID-19
It is no secret that many franchisees are struggling as a result of the pandemic. For those who are at risk of losing their franchises, there may be some unique opportunities for seeking to avoid termination. Some franchisors are offering their franchisees more grace than others, and force majeure clauses and other contractual provisions may provide critical protections against termination for franchisees as well.
Contact the Franchise Lawyers at the Goldstein Law Firm
Do you have questions about buying a franchise (or protecting your existing franchise) in 2021? If so, we encourage you to get in touch. To schedule a free, no-obligation consultation at the Goldstein Law Firm, call 202-293-3947 or request an appointment online today.
