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Learning about the Need for Franchise Lawyers

Aug 9, 2008
Forming or buying a franchise can be an exciting experience, but it can also turn into a huge mess if you don't abide be franchise laws and cover all you bases. That's why so many people hire a franchise lawyer to help them through the process.

Franchising is the practice of using a proven method of doing business. A lot of people are attracted by franchise opportunities because they are less risky than starting up a brand new company. In addition to a proven business method, the franchise you buy into usually comes with a powerful support system and the reputation, logos and other trademarks that accompany the original franchise. These factors can make business ventures quicker and easier to start and expand.

On the other hand, there are a few disadvantages to setting up a franchise association. For example, the fees or percentage that the original owner exact of franchisees can be pretty high in many industries and the franchisee also looses the right to make certain changes in their business by agreeing to abide by the franchise rules. Additionally, when conflicts arise between a franchisee and its franchisor, court rulings often favor the larger entity.

These disadvantages can be minimized by having a competent franchise lawyer protecting your rights while you set up your franchise association though. For example, they will make sure that the franchisor meets all the requirements set by the FTC and the state such as registering themselves as a franchise and providing any potential franchisees with full disclosure documents prior to the sale.

Franchisees aren't the only parties who can benefit from franchise lawyer services though. Although franchisees have traditionally gotten the short end of the stick in legal disputes, franchisors still need to be prepared to defend their case when conflicts arise. For example, sometimes a franchisee simply gets tired of paying royalty fees - especially after they have learned the business and gained enough confidence to start a similar operation on their own. A breach of contract at this point would be unfair to the franchisor and unjustified by the original agreement. This is just one situation in which franchisors would also need a franchise lawyer.

More common than franchisee suits are customer cases though. After all, since franchisees are widely known and very successful, they are often the target for disgruntled customers looking to make a buck. That's why it is important to find a lawyer with litigation experience and a good understanding of franchise law.

With franchise companies generating more than $800 billion a year, there is definitely an incentive to get into the business. You just need to make sure that you have the protection you need.
About the Author
Einbinder & Dunn, LLC is a New York law firm that specializes in franchise law. A franchise lawyer from their firm can meet any of your registration, contract and litigation needs. For more information, visit their website at http://www.ed-lawfirm.com/. The author, Art Gib, is a freelance writer.
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