Franchise Agreement Lawyer

If you are in need of an experienced and reliable franchise agreement attorney, Mario L. Herman and Gregory O Herman are here to serve you. Mario Herman has worked with hundreds of franchisees during his 30-plus years of experience, and we know the ins and outs of franchise law.

Franchise Contract Review

If you are looking to purchase a franchise, we can review the franchise documents you have been given to help you understand the company you seek to partner with and ensure there are no surprises. We flag important provisions that carry the most risk and explain what room, if any, you have to negotiate.

Partnership

Mario L Herman and Gregory O Herman are dedicated to franchise law as the main focus of their legal practice and are up to date on changes and developments in the franchise industry. A prospective franchisor or franchisee should not take the risk of working with a general practitioner, as they are not familiar with the nuances of franchise law.

Franchise Law 

Mario Herman has studied franchise disclosure documents from hundreds of franchise businesses across hundreds of industries. Failing to draft your franchise documents properly can result in costs and delays, and can also render a contract’s terms unenforceable should they be challenged at a later date. From restaurants to hotels to franchise companies large and small, Mario Herman has the experience you need to prepare the necessary legal documents and get them right the first time.

Franchise attorneys Mario Herman and Gregory Herman work with franchise parties both internationally and domestically. Some important aspects of starting or buying a franchise include understanding the franchise disclosure document and the individual franchise agreement, negotiating leases, complying with minimum wage laws, meeting local sales tax requirements, and other business-related matters. Our practice is familiar with all aspects of the Federal Trade Commission’s regulations governing the purchase and sale of franchises.

What a Franchise Agreement Includes

A franchise agreement is the contract that defines your relationship with the franchisor and controls how you operate for years to come. Every individual franchise agreement is different, but most cover the same core areas:

• Grant and territory— the rights you receive and whether your territory is exclusive, protected, or open to competition from the franchisor and other franchisees, including online sales.
• Term and renewal— how long the agreement lasts, the conditions for renewal, and whether you renew on the original terms or the franchisor’s then-current form.
• Fees— the initial franchise fee, ongoing royalties, and required contributions to national or local advertising funds.
• Training and support— what the franchisor must provide, both when you open and on an ongoing basis.
• Operating standards— the brand standards, approved suppliers, technology, and operating manual you are required to follow.
• Transfer and assignment— whether and how you can sell or transfer the franchise, and what approval the franchisor must give.
• Termination and post-term obligations— the grounds for termination, your rights if the franchisor ends the relationship, and any non-compete that applies after you exit.
• Dispute resolution— whether disputes go to mediation, arbitration, or court, and which state’s law and venue will apply.

The specifics vary by concept, whether you are signing a restaurant franchise agreement or a master franchise agreement , but the framework above applies across the board.

The Franchise Agreement and the Franchise Disclosure Document

The franchise agreement does not stand on its own. Before you sign, federal law requires that you be provided a franchise disclosure document, or FDD. Under the Federal Trade Commission’s Franchise Rule, the franchisor must give you the FDD at least 14 calendar days before you sign a binding agreement or pay any money. The FDD runs to 23 required items covering fees, litigation history, the people behind the system, and the franchise agreement itself, which is attached as an exhibit. Reading the FDD and the agreement together is the only way to see the full picture.

Resolving Franchise Agreement Disputes

Even a well-drafted franchise agreement can lead to conflict. Disputes often arise over territory and encroachment, allegations of breach, wrongful termination or non-renewal, unpaid or disputed royalties, and claims that the franchisor misrepresented the opportunity before the sale. How a dispute is handled usually depends on the agreement itself, which typically sets out whether the parties must attempt mediation, submit to binding arbitration, or proceed in court, and which state’s law governs. Some franchise relationships are also covered by industry-specific statutes. Gas station franchises fall under the Petroleum Marketing Practices Act, and automobile dealers have their own protections, both of which can override terms written into a franchise contract. We represent franchisees and franchisors through negotiation, mediation, arbitration, and litigation, and we work to resolve matters as efficiently as the situation allows.

Frequently Asked Questions

What is a franchise agreement?

A franchise agreement, sometimes called a franchise agreement contract, is a binding contract between a franchisor and a franchisee that grants the franchisee the right to operate a business under the franchisor’s brand and system. It sets out the rights and obligations of both sides, including fees, territory, standards, term, and how disputes are resolved.

Can you negotiate a franchise agreement?

Sometimes. Franchisors often present the agreement as a standard form, and many core terms are non-negotiable to keep the system consistent. Even so, some provisions can be adjusted, and multi-unit or experienced operators frequently secure changes through addenda. Knowing which terms a particular franchisor will move on is where experienced counsel helps.

What is the difference between the FDD and the franchise agreement?

The franchise disclosure document is an informational document the franchisor must give you before you buy, disclosing 23 categories of information about the system. The franchise agreement is the contract you actually sign. The agreement is included in the FDD as an exhibit, so you can review it during the 14-day disclosure period.

Do I need a franchise agreement attorney to review my contract?

You are not required to, but it is a sound investment. A franchise agreement commits you for years and involves significant money. A franchise agreement attorney can explain the terms in plain language, compare them to industry norms, and identify the provisions that put you most at risk before you are bound by them.

What happens if a franchise agreement is breached?

The consequences depend on the terms of the agreement and which party is alleged to have breached. Remedies can range from cure periods and damages to termination of the franchise. Because the agreement usually dictates how a dispute must be handled, reviewing it carefully before signing, and getting advice early if a conflict arises, can make a real difference.

If you are looking to franchise your existing business or to purchase a franchise, give franchise agreement lawyers Mario L Herman and Gregory O Herman a call today to help with your franchise agreement.