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Franchise & Distribution
Our experience in drafting and litigating the terms of licensing agreements gives our attorneys a unique perspective on contract negotiation. All franchise relationships are predicated on mutuality and fairness between the contracting parties. All parties rely on the enforcement of contractual provisions intended to ensure uniform quality among system franchisees. The key to contract negotiation lies in understanding which provisions can and cannot be negotiated without compromising the integrity of the franchise system.
Day to Day Advice
We are a resource for our clients. As a result of our focus on franchise, distribution and licensing matters, we have a 15 year database of forms and agreements. In most cases, our attorneys can give instructive and experienced advice, in an almost immediate exchange. As our engagements progress, we garner an inside knowledge of our clients, understand their methods of doing business and are able to provide timely and well thought out advice.
Terminations
When a franchisee is not in compliance with his or her obligations under the franchise agreement, the decision to terminate, along with a thorough analysis of all pre-termination options, is critical. A termination, like any decision to end a long-term relationship, has many implications. In most cases, there are options short of termination, which, under the right circumstances, may motivate a franchisee to cure, and thereby save the relationship and protect the cash flow associated with the unit. In-term actions seeking damages for breach of the agreement along with attorneys’ fees are often an effective tool to garner compliance.
We have worked through literally hundreds of franchise disputes, and have a track record of achieving prompt resolutions of even the most acrimonious disputes.
Real Estate
Our attorneys have a great deal of experience in negotiating and concluding commercial real estate transactions. We counsel clients in obtaining contractual changes which protect their interests in a transaction. We also assist clients in obtaining the necessary financing and reviewing the finance documents related to the purchase. We also assist clients in making the necessary inspections prior to becoming contractually bound to purchase the property.
Bankruptcy
In a challenging economy, it is not unusual for certain franchisees, for a variety of reasons, to become insolvent. Generally, insolvency does not happen over night, rather, a situation deteriorates over time. We provide advice to our clients with respect to working through challenging financial circumstances, with the goal of preventing the assets of the franchise from becoming part of the debtor’s bankruptcy estate. In cases where bankruptcy has already been filed, we assist franchisors in garnering almost immediate post-petition contractual compliance, and obtain orders from the bankruptcy court to protect the franchisor’s interests. In other contexts, we have represented franchisors and area developers in acquiring assets through bankruptcy, free and clear of all liens, claims and encumbrances.
Regulatory Compliance
We assist franchisors in complying with the obligations under the FTC Rule and applicable state laws governing the sale of franchises in those states which have registration statutes.
In the ordinary course, we draft franchise agreements and uniform franchise offering circulars for flat fees, which are payable over the course of the engagement. By using predictable flat fees, businesses can more effectively budget the funds necessary to roll out a franchise concept.
For established franchisors, we review existing franchise documents for regulatory compliance and other business or operational issues, and provide detailed comments or revisions with respect to existing documents.
For many clients, we perform national and state-specific registrations of their franchise programs. For these projects, we negotiate a flat fee based on filing status (initial or renewal), and the particular states in which the opportunity will be registered. We have a four-person registration and disclosure team lead by two attorneys who see to the timely updating and submission of registration documents. In addition, we also prepare and file Salesmen Disclosure Forms and Broker Registration Forms as necessary. We also prepare documents which are compliant for use in Canada in both the provinces of Alberta and Ontario.
International
As many of our clients expand beyond the territorial confines of the United States, we provide advice concerning their expansion abroad. We have relationships with various attorneys in other countries who assist us in providing the local perspective on expansion within a particular country.
Mergers and Acquisitions
Clients engage us to provide advice on the best method and manner for acquiring or selling assets. The firm maintains a detailed library of forms of agreement for use in connection with acquiring assets, real property or businesses. We have experience in all aspects of these transactions, including intellectual property, real estate, licensing and other relevant matters.
Franchise Your Business
Over the last 14 years, the firm and its principals have gained substantial expertise in helping companies with strong unit economics and good concepts use franchising as a means of exploiting market opportunities. Franchising has emerged as an alternative source to growth capital, where franchisees are responsible for financing the costs associated with unit growth. Many companies look to franchising as a means of developing the operational talent, coupled with the vested interest in making a unit successful, as an alternative to bearing the economic cost in financing the construction and developing the managerial talent necessary to achieve success. The firm has worked with multiple startup franchisors in the retail and service businesses, and has considerable expertise in identifying those structures which work and which do not. Please contact us for a free consultation about whether franchising is an appropriate vehicle for exploiting your business.
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