Franchised businesses can be very successful and lucrative for both the franchisee and the franchisor but like all business ventures it is essential to understand all aspects of the agreement before entering into one and if disputes arise.
The team at Loftus & Eisenberg have in-depth experience and background includes extensive understanding of the unique franchise system contractual provisions, potential disputes, and legal issues makes them distinctively prepared to negotiate and litigate of behalf of either side when needed.
The attorneys at Loftus & Eisenberg aggressively defend and protect franchisors and franchisees by negotiating contracts, litigation and arbitration and have represented individual and multi-unit franchisors, franchisees and dealers throughout the country in many industries.
Franchise disputes that can lead to litigation are often due to disagreements regarding territories, clause disputes within franchise agreements, non-compete agreements, consumer fraud claims, desire for franchise termination including execution of post-termination commitments, infringement or misuse of trademark or copyright, and antitrust and class actions.
The vast majority of franchise cases brought on by franchisees are due to franchisees being promised much more than what was delivered, in some cases with intent. This improper practice within the franchise industry is unacceptable and it is imperative to hold those accountable for fraudulently selling franchises.
The Franchise Disclosure Document (“FDD”) is a highly regulated disclosure form used by franchisors to support their promised performance. Most Franchise Litigation turns on the content of the disclosures made and the compliance with state and federal regulations regarding the content of the FDD. If the rules for FDD disclosures are not fully complied with the franchisee may be held liable for fraud, violation of state franchise act, and negligence. While the federal franchise rules do not create a private cause of action they may be used to establish a standard of care for a negligence claim.
There are often disputes led by franchisors against franchisees for numerous infringements of the contract and expectation of the agreement. Some of these are system standards enforcement, collection of fees and system royalties, personal and real property involved in the franchise recovery, and putting into practice of promises against competition.
Most franchise litigation takes place in arbitration rather than court. The attorneys at Loftus & Eisenberg have handled over 500 arbitration claims and appreciate how different it is than court litigation. Arbitration has more relaxed rules and can be more driven by personality and costs of litigation than the merits of the claims.
Loftus & Eisenberg represents both franchisors and franchisees in both current and former agreements to help resolve disputes that arise as resourcefully as possible.