Several years ago we published an article titled, What Not to Expect from Your Franchisor. That article was intended as a warning to prospective franchisees who were going through the buying process with a rose-colored vision of what it meant to own a franchise. But, let’s say that now you bought a franchise, and you are struggling to get the support the franchisor’s sales reps promised before you signed. What can—or what rather what should—you expect from your franchisor? National franchise lawyer Jeffrey M. Goldstein explains.
5 Things You Are Entitled to Expect as a Franchisee
As a franchisee, you are entitled to a number of reasonable expectations. For example, at a minimum, franchisors should provide each of the following:
Franchisor support is one of the hallmarks of the franchise system. Many franchisees choose franchise ownership specifically because they want to be able to rely on the franchisor when they need to. Franchisees cannot expect their franchisor to run their businesses for them. But, they can expect their franchisors to provide advice based on their experience and assistance when aspects of their systems are not working.
Franchisors must comply with the terms of their franchise agreements. They must also comply with the law. If your franchisor is not upholding its end of the bargain, or if your franchisor has violated the FTC Franchise Rule or your state’s franchise relationship or disclosure law, you may be entitled to legal or equitable remedies (although you may have to pursue mandatory mediation or arbitration to secure them).
Franchisors should enforce their system standards when necessary. If other franchisees are diluting the value of the brand (i.e., by selling unapproved products) or marketing in your territory, your franchisor should rectify the situation. Likewise, if a third party is infringing on your franchisor’s trademarks or other IP rights, your franchisor should take legal action to protect the value of your investment.
We also included this on our list of things not to expect, noting that franchisors make changes to their systems over time. However, franchisees are entitled to expect consistency when it comes to enforcement. If your franchisor has singled you out for disparate treatment, you may be entitled to remedies for this unfair franchise practice.
Finally, franchisees are entitled to expect that their franchisors will put in the effort necessary to grow the system and help each individual franchisee succeed. Unfortunately, as with each of the reasonable expectations discussed above, franchisors often fall far short in this regard. If your franchisor isn’t doing enough to help you and your co-franchisees build profitable businesses, you should speak with a franchise lawyer about the options you have available.
Request a Free and Confidential Consultation with National Franchise Lawyer Jeffrey M. Goldstein
If you need to know more about your legal rights as a franchisee, we encourage you to get in touch. To schedule a free and confidential consultation with national franchise lawyer Jeffrey M. Goldstein, please call 202-293-3947 or inquire online today.