This is an informative article. The statement below has me thinking.
" legal compliance provides greater protection for franchisors (by insulating them from claims of misrepresentation and by giving the appearance of state and federal validation and endorsement) than it does to franchisees and prospective franchisees....there are no substantive rights conferred on franchisees..." - Purvin
If a franchisor has some sort of stake in the ground, a written claim in its disclosure document, doesn't that put the franchisor at more legal risk? Please explain.
Purvin is correct about the value to the zor of full disclosure. One of the often overlooked aspects of the history of franchise regulation is that the franchise industry lobbyists lined up behind disclosure legislation as a means of forestalling relationship legislation.
So you bury in the UFOC/FDD/Franchise Agreement all sorts of legal obligations and reserved rights clothed in obfuscating language. Then when the franchisee protests, the Judge will say "Your franchise agreement says you agree that the franchisor has the sole and unfettered discretion to select vendors of raw materials used in the operation of your franchise. The franchisor has the right to force you to pay twice the market price for your pizza dough and buy it from a company owned by the franchisor's Cousin Louie. Now, send Cousin Louie a check."
I have never understood those zors who don't provide full disclosure of how they intend to screw their zees. It is a no-brainer for any franchisor, particularly the franchisor who wants to overreach. Really, hardly any zees read the documents anyway; those who do read the docs normally fall into brain coma by page 4 and don't comprehend the import of the terms anyway.
Richard Solomon, FranchiseRemedies.com, has 44 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Disclosure Designed to Protect Franchisors?!?
This is an informative article. The statement below has me thinking.
If a franchisor has some sort of stake in the ground, a written claim in its disclosure document, doesn't that put the franchisor at more legal risk? Please explain.
Purvin is correct re: Franchise Disclosure
Purvin is correct about the value to the zor of full disclosure. One of the often overlooked aspects of the history of franchise regulation is that the franchise industry lobbyists lined up behind disclosure legislation as a means of forestalling relationship legislation.
So you bury in the UFOC/FDD/Franchise Agreement all sorts of legal obligations and reserved rights clothed in obfuscating language. Then when the franchisee protests, the Judge will say "Your franchise agreement says you agree that the franchisor has the sole and unfettered discretion to select vendors of raw materials used in the operation of your franchise. The franchisor has the right to force you to pay twice the market price for your pizza dough and buy it from a company owned by the franchisor's Cousin Louie. Now, send Cousin Louie a check."
I have never understood those zors who don't provide full disclosure of how they intend to screw their zees. It is a no-brainer for any franchisor, particularly the franchisor who wants to overreach. Really, hardly any zees read the documents anyway; those who do read the docs normally fall into brain coma by page 4 and don't comprehend the import of the terms anyway.
Paul, I'm starting to think that...
your sister may have been wrong about you.--
Richard Solomon, FranchiseRemedies.com, has 44 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Full Disclosure
Paul writes: "I have never understood those zors who don't provide full disclosure of how they intend to screw their zees."
Bad franchisors do -but it is in legal code that only experienced franchisee attorneys understand and cannot communicate!
Michael Webster PhD LLB
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