FRANCHISE LAW AND LITIGATION SAN JOSE
A LEADING BUSINESS ATTORNEY SAN JOSE LAW FIRM
Franchises are a form of business where the corporate headquarters does not own and operate each location for its company. Take McDonald’s for an example: The large corporate entity, which trades on the stock exchange under the ticker symbol MCD, does not own and operate every McDonald’s restaurant.
Instead, McDonald’s has franchise owners who operate each restaurant and follow very strict guidelines on the products they are allowed to use, the pricing of products, design of the restaurant, and even employee training protocol. This ensures a consistent product and experience at all of McDonald’s restaurants.
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Examples of franchises are available for nearly every business type imaginable; from restaurants, to hotels, to mechanics, to senior care franchises, tutoring services, and gyms.
Deciding whether to join a franchise is a major decision and you should carefully review the Franchise Disclosure Document (FDD) from the franchisor and consider competitor franchises.
Franchise agreements are 5-20 year contracts. An attorney review of the Franchise Agreement and the Franchise Disclosure Document is highly recommended.
A review of the document is well worth it since you are likely to pay thousands per year for a franchise for a long time. Contact Attorney Nick Heimlich if you would like to discuss reviewing a proposed Franchise Disclosure Document.
Franchise Disclosure Documents (FDD) in California provide a wealth of information regarding a franchise if you are considering purchasing a franchise. An FDD will usually contain a general overview of the history of the franchise including a description of the business, business model, and key executives. You will also generally be informed about how long the franchise has been in business, the number of locations and the financial statements for the franchise. It may also contain information about the financial performance of the franchise business owners. The Franchise Agreement or contract under which the Franchisor will offer franchises is also included. You should be aware that you have a right to review the Franchise Agreement and can ask for changes to the Franchise Agreement. However, just because you can ask does not mean that the Franchisor will be interested in making changes to the Franchise Agreement for you. The Franchisor’s willingness to make changes will depend on many factors, including the size of the Franchisor, how many units you plan on opening, your financial backing, your business background, the uniqueness of your proposed location, the number of locations near your proposed location and many other factors.
Another important consideration is whether you can get any protected territory for your franchise. Some Franchisors will provide a certain territory in which they will not license a particular franchise to another person (such as a 5 or 10 mile radius). The size of the territory (if offered) will vary depending on the franchise, the population density, the type of service or product, and customer preferences.
Attorney Heimlich has advised franchise owners with businesses in San Jose, Ca, and other cities in Santa Clara County. Additionally, Mr. Heimlich has advised franchise owners/prospective franchisees on franchises in a variety of industries, including hotels, restaurants, health care related franchises (such as home health care), services franchises such as daycare providers or tutoring, grocery/food stores.
The Franchise Disclosure Document has many required items and should be carefully reviewed by anyone either in or considering a franchise. The franchise disclosure document will provide background information about the franchise’s business history such as biographies of the main officers. In looking at the officers, a franchisee should ask themselves if the persons have been in the same industry as the franchise? How long? What was their role? How successful was the company that they came from?
Another point is the actual history of the franchise, namely its start dates, number of locations. Franchisees should carefully consider whether the franchisor has a sufficient track record and brand recognition. A new Franchisor may be very enthusiastic but may lack the standardized processes to assist people in getting their new franchise up and running.
There are also disclosures on many other areas, such as financial statements, contract terms, lists of franchisees, litigation or lawsuits, franchisor trademarks and estimated fees and costs to operate and start the franchise.
If you are in Santa Clara County, such as San Jose, Santa Clara, Los Gatos, Palo Alto or Campbell and are looking to have a franchise review, then contact Nick Heimlich.
Should you already be in a franchise and wish to work on exiting the franchise, Attorney Heimlich can review your contract and discuss your options with you. Some franchise contracts provide time periods where exit is relatively easy. Attorney Heimlich has sometimes been able to negotiate resolutions of the franchise based on dissatisfaction of the franchise owner or breaches of the franchise agreement. While there is no guarantee of a simple resolution to a franchise dispute, Mr. Heimlich works with clients to try to obtain a resolution based on their objectives. Some disputes can end up in arbitration or court, and Mr. Heimlich has also helped represent clients in those franchise disputes as well.
Common Problems Faced in Franchising
Franchising can be a lucrative business model, but it also comes with its fair share of challenges. Some common problems faced by both franchisors and franchisees include:
1. Disputes Over Franchise Agreements
Franchise agreements are complex legal documents that outline the rights and responsibilities of both the franchisor and the franchisee. Disputes may arise if either party believes that the other has violated the terms of the agreement. A franchise lawyer can help resolve these disputes through negotiation, mediation, or litigation.
2. Regulatory Compliance Issues
Franchising is subject to various federal and state regulations, including disclosure requirements and franchise relationship laws. Failure to comply with these regulations can result in legal consequences for both franchisors and franchisees. A franchise lawyer can ensure that all parties involved adhere to the necessary legal requirements.
4. Intellectual Property Issues
5. Compliance with Franchise Disclosure Requirements
NICK HEIMLICH LAWS FRANCHISE ATTORNEYS IN SAN JOSE
At Nick Heimlich Law, our team of franchise attorneys is dedicated to providing top-notch legal support to clients in San Jose and beyond. With years of experience and a deep understanding of franchise law, our attorneys are well-equipped to handle a wide range of franchising matters.
From drafting and reviewing franchise agreements to resolving disputes and ensuring regulatory compliance, our team is committed to delivering comprehensive and effective legal solutions tailored to your specific needs.
What is a Franchise Attorney?
A franchise attorney is a legal professional who focuses on the intricate legal aspects of franchising. This includes a comprehensive understanding of various legal components crucial to both franchisors and franchisees. Here are some key areas where a franchise lawyer provides expertise:
Franchise Agreements
Disclosure Requirements
Regulatory Compliance
Dispute Resolution
Franchising Lawyer for Franchisors
For franchisors, a franchise lawyer plays a crucial role in helping them establish and expand their franchise systems while protecting their legal rights and interests. From drafting franchise agreements to ensuring compliance with franchise laws and regulations, a franchise lawyer provides invaluable guidance and support throughout the franchising process.
Franchising Attorney for Franchisees
For franchisees, a franchise lawyer serves as a trusted advisor and advocate, assisting them in understanding their rights and responsibilities outlined in the franchise agreement, and ensuring that their interests are protected. Whether reviewing franchise agreements, assessing disclosure documents, or resolving disputes with franchisors, a franchise lawyer helps franchisees navigate the complexities of franchising and make informed decisions about their investments.
WHY CHOOSE OUR FRANCHISING ATTORNEY
When it comes to franchising law in San Jose, our firm stands out for several reasons. Our attorneys have a proven track record of success in handling franchising matters, and we are committed to providing personalized attention and strategic guidance to each of our clients.
We understand the complexities of franchising law and are dedicated to helping our clients achieve their franchising goals while protecting their legal rights and interests.
Frequently Asked Questions for Franchises.
I’m considering a franchise, why should I speak with an attorney?
Buying a franchise is a big step because you are either buying an existing business or starting up a new business. Starting a business can be one of the most rewarding decisions of your life, but also one to take precautions for because of the risks involved. An attorney will help you with many aspects of the franchise and general business advice.
An Attorney may help with many of the following:
- Franchise Disclosure Document Review.
- Review multiple Franchises for consideration.
- Franchise Agreement Review and modifications.
- Advising on Business licensing.
- Advising on corporate formation (Corporations, Limited Liability Companies, S-Corp).
- Advise on how to minimize liabilities and maintain the corporate protection when operating your business.
- Lease Agreement Review.
- Employee Advising on Wage-Hour issues.
- Review Trademarks of the proposed franchise to verify their registration.
I’m having issues with a franchise I’m operating, but I’m stuck in the contract. What can I do?
An attorney can review your situation and issues you may be having with your franchisor.
An attorney will help with these items:
- Review your Situation and listen to your concerns or problems.
- Discuss ways to try to address your situation either yourself or with your franchisor.
- Review your Franchise Agreement for any breaches by the Franchisor that might allow you to exit the Franchise.
- Review your liability if you decide to cease operating the franchise agreement.
- Negotiate with your franchisor if issues cannot be resolved.
- Initiate or respond to lawsuits regarding breach of your franchise agreement.
Some Franchisors realize that if you are not a strong representative for the franchise that can hurt their brand and will either work with you to fix problems or allow you to exit the franchise even before your contract is up. Alternatively, they sometimes allow someone else to take over your franchise and even buy you out of your franchise. You have options and discussing those with an attorney will help you realize that continuing to operate a franchise that is not making money is not a good business plan.
As a lawyer, Mr. Heimlich has dealt with advising clients who are either franchisees, are considering a franchise or want to cease being a franchisee. I have had the opportunity to review and advise many client on franchises from multiple industries. Below is a short and non-exhaustive list of the industries/franchises I have reviewed.
- Hospitality Industry: Best Western Hotels, Holiday Inn Express, Wingate Hotels.
- Food and Restaurant Industry: WingFiesta, Extreme Pita, Jake’s Wayback Burgers®, Lite for Life, Inc.
- Senior Care Franchises: Right at Home, Inc.
- Tutoring and Learning Centers: Kumon®, Mathnasium, Huntingdon
- Animal and Wildlife Control Business: Critter Control®
Please note that some reviews or issues may have been years ago and may not cover a current franchise’s documents, as those can change yearly. Please note that having reviewed these franchise documents implies no endorsement from any given franchise, as attorney is independent and not affiliated with the franchises listed above.
If you are in Santa Clara County, such as San Jose, Santa Clara, Los Gatos, Palo Alto or Campbell and are looking to achieve a franchise termination, then contact Nick Heimlich.
