Wrongful franchise non-renewals have unfortunately become a normal — although gargantuan — risk of being a franchisee. Franchisees and dealers are regularly confronted with the possibility of non-renewal of their franchise or dealership agreements. Like wrongful terminations, wrongful non-renewals of such agreements by franchisors, suppliers or manufacturers threaten to destroy the businesses and personal finances of franchisees and dealers that have worked their full contract term. Often times, when the original franchise or dealership agreement term expires, franchisees or dealers have already worked their entire adult lives creating their successful, but now non-renewed businesses.
Many franchisees and dealers improperly assume that upon expiration of the term of their franchise or dealership agreement, they have an undeniable right to renew the agreement. Unfortunately, however, nothing could be further from the truth. Although many years ago this view might have had some validity, currently the law almost everywhere is that, absent a particular franchise or dealership statute, franchisors, suppliers and manufacturers are usually under no legal obligation to renew a franchise or dealership agreement at the expiration of its term.
However, some state and federal statutes have provided franchisees and dealers with narrow protections upon expiration of their agreements. With very rare exception, such statutory protections do not banish non-renewals, and only require franchisors, suppliers and manufacturers to provide some form of written notice of non-renewal within specified time frames. These statutes, and their application to particular franchise and dealer agreements, is complex and obscure, requiring the expertise of a franchise lawyer, like Jeff Goldstein, who represents only franchisees throughout the country.
Interestingly, many non-renewal cases arise when franchisors, suppliers or manufacturers, refuse to provide renewals, even though the relevant agreement itself might provide for one or more renewal periods after the initial term. Many times, non-renewal disputes arise from a requirement within the agreement that provides for what appears to be an ‘automatic’ right to a renewal, so long as the franchisee or dealer has met all of its obligations during the original term of the agreement. In some cases, this means that a franchisee must have met an infinitely high threshold requirement; the franchisee must not have ever defaulted during the entire original term of the agreement. In contrast, in other cases the right to renewal may only require that the franchisee performed adequately during the original term. However, even where the threshold to avoid a non-renewal is relatively easy to achieve for franchisees and dealers, a franchisor with an agenda to remove the franchisee is easily capable of constructing a facially believable argument of ‘inadequacy’ to support its non-renewal in court.
SUCCESS OF GOLDSTEIN LAW FIRM COMBATTING WRONGFUL NON-RENEWALS
Jeff Goldstein and the lawyers at the Goldstein Law Firm have over thirty years of experience and a proven track record in successfully representing only franchisees in wrongful non-renewal cases in all franchise litigation forums – arbitrations and federal and state courts throughout the country. Attorney Goldstein’s track record in preventing wrongful non-renewals on behalf of his franchisee and dealer clients is outstanding. Jeff Goldstein’s victories in preventing wrongful non-renewals, as well as wrongful terminations, allow franchisees and dealers to avoid devastating post-expiration restrictive covenants, which would otherwise prevent them from working in their industries and occupations after expiration of their agreements.
Attorney Goldstein and Goldstein Law, which represent only franchisees in cases around the country, have earned the legal respect of franchisors, suppliers and distributors in all regions and industries. Although franchise laws over the last 10 to 15 years have become extremely biased in favor of franchisors, Jeff Goldstein and his associates are nevertheless still highly successful in obtaining meaningful compensation for wrongfully non-renewed franchisees and dealers in non-renewal cases.
WHAT TO DO IF YOU SUSPECT A WRONGFUL NON-RENEWAL IS LIKELY
As with a wrongful termination, timing is almost everything in the face of a wrongful franchise non-renewal. Even more so than with wrongful franchise terminations, franchise non-renewals are foreseeable and avoidable. However, unlike most wrongful termination cases in which franchisors, suppliers and manufacturers will initially send out default or warning letters of some type, in non-renewal cases the franchisee or dealer may never receive any notice ‘reminding’ the franchisee or dealer of the expiration and non-renewal. The original term simply expires and, without proper notice, the right to renew is extinguished.
Given that a non-renewal of your franchise or dealership agreement may spring up without any formal or informal notice, you should always keep track of the dates of your initial term and any renewal rights. Frequently, in order to exercise your renewal rights you will be required to provide specified written notice to renew within a mandatory time period. If you fail to do so, you will lose your right to renew.
To effectively combat an actual or anticipated wrongful dealer or franchise non-renewal, you should contact Jeff Goldstein at the Goldstein Law Firm at 202-293-3947. Don’t let your franchisor or supplier’s hidden agenda of allowing your franchise term to expire without renewal destroy your business and personal fortunes.