Successful franchise systems depend on the relationship between the franchiser and franchisee. A good way to help support that relationship is to hire an attorney who practices franchise law before you begin developing your business in that direction. This lawyer can help protect your interests through litigation, advice and drafting documents.
Litigation Help and Avoidance
Litigating court cases is just one part of the help you can get from a lawyer, because avoiding litigation and drawing up contracts are also important to protect your interests. This means ensuring that your Franchise Disclosure Document meets legal requirements, helping to draft policies, system communications and franchise contracts as well as showing you how to accurately document any interactions you have with franchisees. Franchise litigation can also be avoided by mediation efforts before papers are filed, but the ones which do make it to court will usually rely on having the documentation to prove your case.
The Fine Print
The two biggest myths about franchise systems is that they are only in the customer service industry and that it is easy for the brand to be involved in legal disputes with franchisees. There are thousands of different franchise systems across all industries and the more locations a system has, the more likely they are to be involved in a lawsuit. However, research indicates that most systems have one or fewer reported lawsuits. The clearer your contracts are and the more honest your FDD is, the easier it is to establish clear boundaries, responsibilities and conflict resolution practices with franchisees.
A franchise attorney can do more for your business than litigation such as helping you avoid potential liabilities, draft solid legal documents and even advise you on how to handle and document interactions with franchisees. If your system is one of the few to see a lawsuit, your attorney can help work out a deal before you get to court or litigate on your behalf.