Franchising could be very lucrative and bring lot of success towards you but if you are not familiar with the parent company franchising could be a very big risk for you. Franchise deals involve lot of money investment and in case of any dispute or disagreement; these deals could turn very sour. That is why one should get a franchisee attorney to assist in securing the deal. The need of these attorneys is for sure good when the financial and legal aspects come under consideration. Franchises are generally agreements between two parties i.e. you and the parent company. Most of you will get to display your money in a signed agreement. In many cases, the agreements are full of legal jargon and perplexing terms. If you cannot decode all these terms and words by yourself, a franchisee attorney could be one of the very good idea. The expert franchise lawyers have the innate potential of sniffing out those loopholes, protecting the transaction and your hard-earned investment in the process. Look for the right Franchisee Attorney It is crucial and good for you to understand that not all lawyers are made alike, particularly in the very assorted field of franchise law. Franchise law is in fact a very extensive specialization since it embraces anything ranging from a big manufacturing operation to a small retail business enterprise. Look for the franchise attorneys who have an experience in the explicit industry where you desire to franchise. Look for the referrals, testimonials, browse internet for all the trustworthy information. To know more about the franchisee attorney visit www.franchise-law.com
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If in case you are facing problems with your franchisor then don’t sign any document describing dispute resolution. Franchisors usually offer a small concession to help you but extract a definite amount of claim and other factual representations in return. It is normally seen that the franchisees experiencing financial problems in their franchise business usually approach the franchisor for help. After giving veiled threats of taking the franchise back from the franchisee, the franchisor agrees to help by making a small amount concession by delaying the payment and reducing the minimum royalty amount for a short period of time. In this situation, franchisee out of desperation, sign the agreement as they were explained by the franchisor that if they fail to sign the agreement, they could lose their business rights. In this particular situation, there is an urgent need to consult an experienced franchisee attorney before signing. Because of lack of consultation, franchisees did not find the “boilerplate” clause inserted by the franchisor. In the agreement, franchisor inserts the clause that says franchisee had consulted with a business lawyer and they had no claims against the franchisor for anything whatsoever and even the franchisor had never done anything wrong. The franchisor makes sure to add in the agreement a general release from all claims. In every part of the world except Washington, a general release is enforceable against the franchisee. The attempt of the franchisor to force you to sign on those false “representations” that says you have consulted one of the Franchising Lawyers prior to signing the document, actually it can make the situation even worse. In many situations, it is suggested to the franchisee to confront their genuine disputes with the franchisor rather than going to take the offered benefit. The benefits offered by franchisor rarely protect the franchise business from failure; in fact, they work more as a protective shield for any wrong act of the franchisor. In a nutshell, if you are going for renewal of the franchise agreement with your franchisor, it is crucial to consult your franchise attorney with your renewal document. Ideal franchising agreements always preserve the rights of both, the franchisor and franchisee. The profit earned by a fair means with satisfaction is the key to success of any franchise business. But, this scenario is rarely seen nowadays. At any instance, there is a clash between the franchisor and the franchisee, everything turned up into a dispute. An unhappy franchisee could definitely harm the franchise business while the franchising firm is always on upper hand than the franchisee when it comes to taking legal resources. Owing to this, franchising organization takes the utmost benefit at the time of franchise disputes. Irrespective of the results, franchise litigation is definitely very much dangerous for the franchising organization. It is reflected in the firm’s FDD and this persuades the investor’s decision. This risk is sometimes considered beneficial for boosting the position of the franchisor. On the whole, we can say litigation is having both sides i.e. good and bad for franchising organization. The franchisor or the business owner always has good economic resources and because of this, access to the stronger guidance of law. The process of franchise litigation involves the steps that may lead to a court trial to settle the dispute. In many instances, franchisees may show their disagreement when they have legal trials. Arbitration and Mediation Arbitration and Mediation are the two easiest ways to resolve the dispute between franchisor and franchisee. Sometimes, the franchisor wants to end up the dispute as soon as possible as this affect their reputation among the investors. Mediation and arbitration have a tendency to be more on franchisees side than franchisors. If the franchisor thinks that arbitration process could go in favor of franchising organization, they may try to go for this option while if they think they are weak somewhere, they prefer to go for litigation. Many franchisors normally prefer to keep their options open by being comfortable to stress on arbitration and mediation procedure where they think the process is in favor of franchising organization but, these firms thrust into litigation where they think arbitration and mediation would possibly go against the franchisor. This comfort keeps the franchise on the upper hand and due to frustration, franchisee starts working against the best interest of the franchise owners. So, it is extremely important for the franchisees to recognize their status while lodging the complaints against franchisor to settle the dispute. A franchisee attorney can help you in settling the dispute by preserving your rights |
AuthorMr. Herman has lectured at the First Annual Franchise Conference held in Shanghai, China in October 1998. He has also lectured on Franchising Issues in San Jose, Costa Rica in September 2001, and with the ABA Forum on Franchising in Orlando, Florida in October 2005. Archives
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