A Guide to Navigating Franchise Law APR 2022 | WWW.LAWYER-MONTHLY.COM within a franchise system (i.e. franchisees using unauthorised trademarks) or franchisors protected their trademarks nationwide from outside infringers. These informal disputes will often involve allegations of federal or state franchise law violations, which may lead to more formal dispute resolution methods such as mediation, arbitration or litigation. In those instances, franchise disputes can involve fraud and misrepresentation claims or violations of the covenant of good faith and fair dealing in various states. Often, fraud and misrepresentation claims stem from when the franchisor was marketing and selling the franchise and made financial performance representations which were, or were found to be, misleading based on a variety of circumstances. What is the typical process involved in litigating a franchise dispute? Most franchise disputes that our firm handles are resolved through information settlement discussions; however, litigating franchise disputes can take many forms. Sometimes franchise disputes are litigated at the Depending on the state, franchise law is governed by the Federal Trade Commission and, possibly, a specific state’s franchise regulations. What are the most common franchise disputes that you encounter? Most franchise disputes are handled through informal discussions or negotiations. These typically include franchisees who are unhappy with the franchise relationship and want to leave the franchise system. In these instances, some of the biggest questions that arise are non-competition agreements and financial considerations for letting a franchisee out of a franchise agreement prior to the end of the contractual term. Other disputes in franchising involve intellectual property disputes both In brief, what regulations govern franchisee and franchisor obligations in your jurisdiction? Franchising is a unique area of law that is regulated by both the federal government and various states. The Federal Trade Commission lays the foundation for laws governing franchising and gives guidelines as to how a franchisor must disclose its business model to potential buyers (i.e. franchisees). From there, various states have their own franchise laws that govern how and when a franchisor can offer or sell a franchise in that particular state; how a franchisee in that state may be terminated; how post-term covenants such as non-competition agreements, are handled and how franchisor/franchisee relations will be managed in disputes such as mediation, arbitration or litigation. MY LEGAL LIFE - JASON POWER As a highly specialised and wide-ranging area of law, franchise law requires in-depth training and experience to be handled correctly. We hear this month from Jason Power, Managing Attorney at Franchise.Law. Below, he offers his depth of knowledge on the ins and outs of franchise law, the causes behind franchise disputes and the key to averting them before they can occur. 29
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