Franchise Law

Franchisees, dealers and distributors, and small businesses in general are among the least represented groups in our country. The franchise and distribution agreements and commercial leases they are presented with have been drafted and refined over the years by attorneys for franchisors, manufacturers and landlords charged with protecting their interests. The agreements are long and complex, and by signing one you will be agreeing to a long term and expensive relationship. Having been involved in reviewing such agreements and litigating disputes over them for decades, we believe it is imperative for franchisees to receive legal advice before they sign or renew these agreements. For this reason, Lagarias & Napell, LLP usually offers a flat fee to review and advise you concerning franchise or other agreements and the accompanying offering circulars.

Disputes with your Franchisor

Our experience in representing franchisees, distributors and dealers in their relationship disputes has taught us to determine the client's objective first, and then pursue it as efficiently as possible. Sometimes a satisfactory resolution may be obtained by unilateral action or by negotiation. In other instances, arbitration, litigation or trial are necessary. In this regard we address common franchise and distributorship issues including rescission of the agreement and return of funds for misrepresentations and non-disclosures in the offer and sale of franchises; breach of contract including the covenant of good faith and fair dealing; unfair practices or competition by the franchisor, including encroachments, misuse of advertising funds, cram-downs of new and unfair contract terms, violations of franchise statutes; improper terminations in breach of contract or statutes; improper pricing in violation of Uniform Commercial Code; antitrust laws; and other unfair trade practices. Please click on the links below for further information on franchise litigation:

Purchase on Sale of Business

Lagarias & Napell can also assist in the purchase and sale of an existing franchise or distribution business. Franchise and distribution agreements generally require the franchisor’s or distributor’s approval for the sale of an existing business. They often impose a transfer fee, require the buyer to sign a new, different agreement, and impose restrictions on the business the seller can conduct after the sale. Anticipating and planning for these restrictions, and being prepared to minimize their impact or negotiate or fight them, is crucial to achieving a successful sale.

Independent Franchisee Associations

Franchisee associations are one of the most effective tools franchisees have to influence the franchisor, or to furnish services and support the franchisor does not provide. Franchisee associations can aggregate the experience, energy and resources of many franchisees for multiple purposes. They can have leverage with the franchisor which no individual franchisee would have in order to achieve a voice in system policies. They can provide their members with advice and best practices, or combine their purchasing power to obtain better prices from vendors and suppliers. Lagarias & Napell can help to organize and form franchisee associations, and advises and represents them in their dealings with franchisors and vendors.

The articles below provide general background information including about the California Franchise Investment Law and the California Franchise Relations Act. As throughout the website this is general information and you are cautioned not to take any actions without first retaining qualified franchise legal counsel.


 

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