WWW.LAWYER-MONTHLY.COM 29 for their royalty payments or when the franchisor believes locations need to be upgraded to meet changing consumer preferences. A Franchise Agreement that addresses both pre-dispute and dispute resolution processes and that provides the franchisor with the ability to require updates to the location, its equipment, and offerings during the term of the relationship is critical. In your experience, what are the most critical aspects of a franchise agreement, and how can franchisors ensure that these are both enforceable and adaptable to changing circumstances? The most important provisions in a Franchise Agreement are those that address the obligations of the parties during the term of the relationship. It is vital to ensure they accurately reflect the realities of that relationship. Additionally, the dispute resolution provisions are integral because they become crucial in the event of a dispute. In terms of enforceability, it is important that there is mutuality of obligation. Lastly, the provisions that address the parties’ obligations at the end of the relationship are also critical. These provisions need to address confidentiality, noncompetition, the ability of the The buyer will be required to undergo training by the franchisor, pay a transfer fee, upgrade the location to meet the franchisor’s then-current standards, and sign the then-current form of the Franchise Agreement. Can you discuss common issues that mature franchisors face, particularly with regard to franchisee disputes, and how these can be mitigated through proper legal structuring? In the life of any successful franchisor, there will, at a certain point, be tension in the franchise relationship. This tension may arise when franchisees no longer feel the franchisor is providing value About Joe Joe Fittante advises franchisors, both mature and emerging, on a variety of topics including structuring the relationship, registration and disclosure, supply chain, brand integrity, transfer and other system critical issues. He counts his clients as some of the most well-known brands in franchising. He routinely represents franchisors who are buying or selling franchise systems as special franchise counsel to advise on the health of the system and various other franchise issues. Joe is a past chair of the American Bar Association Forum on Franchising and frequent author and lecturer on issues important to the franchise industry. franchisor to secure the real estate, and de-identification. With supply chain disruptions becoming more common, how can franchisors legally safeguard themselves while supporting franchisees in times of crisis? Franchisors need to have redundancy in their supply chain to ensure that if one supplier is unavailable, another can step in. Franchisors should also work with their franchisees to identify localized supply sources that may be less likely to experience disruptions. Moreover, franchisors should ensure their Franchise Agreements do not guarantee supply chain stability and that they include exculpatory language regarding sources of supply. Contact Joe Fittante President | Shareholder Larkin Hoffman Daly & Lindgren jfittante@larkinhoffman.com Tel: 952 896 3256 www.larkinhoffman.com
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