Illinois Franchise Litigation Attorney with 40+ Years of Experience Representing Franchisees
As a franchisee, it is critical to make informed decisions if you are facing litigation with your franchisor. Facing litigation presents a variety of challenges, and mitigating your risk starts with engaging an experienced Illinois franchise litigation attorney who can guide you forward.
Illinois franchise litigation attorney Jeffrey M. Goldstein has more than 40 years of experience representing franchisees in disputes with their franchisors. He has extensive experience in litigation as well as alternative dispute resolution (ADR) proceedings involving franchisor-franchisee disputes, and he has a proven record of success. While there are no guarantees, Mr. Goldstein can help ensure that you are making the right decisions with your long-term best interest in mind, and he can represent your business in negotiations, in ADR and in court as necessary.
Common Issues in Franchise Litigation
Franchise litigation can involve a wide range of issues. When facing a dispute with your franchisor, it is imperative that you have a clear understanding of all pertinent issues, including not only those currently involved in the dispute but also those that may become involved in the dispute in the future. This is essential for informed and strategic decision-making and thinking ahead (and making contingency plans as warranted) will help ensure that the process is as predictable as possible.
Some examples of common issues in franchise litigation include:
Franchise Disclosure Violations
Franchisors are required by law to provide prospective franchisees with a Franchise Disclosure Document (FDD) that contains accurate information about the franchisor’s personnel, finances, and the franchise system as a whole. When franchisors fail to provide prospective franchisees in Illinois with a complete and accurate FDD in a timely manner, this can provide grounds to seek rescission and other remedies in some cases.
Franchise Agreement Violations
Franchise litigation frequently involves allegations of franchise agreement violations by both parties. These allegations can vary widely, and can include (but are by no means limited to):
- Nonpayment of royalties and advertising fund contributions
- Noncompliance with franchise system standards
- Noncompliance with competitive restrictions
- Breach of representations and warranties
- Wrongful refusal to approve a transfer or renewal
Again, these are just examples. Litigation between franchisors and franchisees frequently involves allegations of contractual breaches on both sides. If you are facing a dispute related to your franchise agreement, you will need to work closely with an experienced Illinois franchise litigation attorney who can accurately assess your potential claims and defenses.
Franchisor (and Franchisee) Fraud
Fraud allegations are common in franchise litigation as well. Fraud claims can involve allegations of material misrepresentations or omissions made either before or after signing the franchise agreement. In both scenarios, it is critical to determine what evidence is available, as the availability of evidence will play a key role in determining what allegations both parties can effectively pursue.
Antitrust Violations and Other Unfair Franchise Practices
Antitrust laws play an important role in franchising. They restrict franchisors in many ways—all of which are designed to protect franchisees, their customers or both. Unfortunately, franchisors don’t always comply with the law. Antitrust violations are commonplace in franchising, and, when franchisors violate the law, they can—and should—be held accountable.
Other unfair franchise practices can give rise to claims in franchise litigation as well. These include everything from unfair pricing restrictions to unfair enforcement practices. Here too, an experienced Illinois franchise litigation attorney can help you understand your options and decide how best to proceed under the circumstances at hand.
Territorial Encroachment
If you have an exclusive or protected territory and your franchisor (or another franchisee) encroaches on your territorial rights, you can—and should—take appropriate action in this scenario as well. While these will be honest mistakes in some cases, in others, litigation or ADR may be necessary. Territory-related disputes are commonplace as well, particularly in certain types of industries and geographic locations.
Selective (Discriminatory) Enforcement
Franchisees who receive dissimilar (and unfavorable) treatment compared to other similarly situated franchisees may have grounds to pursue claims for selective enforcement. In many (but not all) cases, this will involve pursuing a claim for franchise discrimination. While franchisors do not necessarily have to treat all of their franchisees equally, there are limits on their ability to selectively enforce compliance. If you believe that you may be a victim of selective or discriminatory enforcement, Illinois franchise litigation attorney Jeffrey M. Goldstein can help you understand the options you have available.
Wrongful Terminations (or Threats to Terminate)
If you believe that you may be a victim of wrongful termination (or if you believe that you may be at risk of losing your franchise), you should consult with an attorney right away. In this scenario, time can be of the essence, and taking proactive measures to protect your legal rights can be critical for mitigating the costs involved.
Franchisees’ Rights Under Illinois Law
Illinois is one of the limited number of states that has both a franchise disclosure law and a franchise relationship law and that provides franchisees with a private right of action. Franchisees can pursue claims for disclosure violations, wrongful refusals to approve transfers and renewals, wrongful terminations, and a wide variety of other prohibited practices under the Illinois Franchise Disclosure Act (IFDA).
Along with providing franchisees with the right to take legal action when necessary, the IFDA also provides franchisees with the right to recover their attorneys’ fees and costs if their claims under the statute are successful. This alone can apply pressure to franchisors to consider reasonable options for avoiding litigation, and it helps ensure that franchisees have the ability to pursue appropriate remedies in litigation or ADR when necessary.
Schedule a Free, No-Obligation Consultation with Illinois Franchise Litigation Attorney Jeffrey M. Goldstein
If you are facing a dispute with your franchisor in Illinois, we invite you to contact us for more information. To schedule a free, no-obligation consultation with Illinois franchise litigation attorney Jeffrey M. Goldstein, please call 202-293-3947 or tell us how we can reach you online today.
