Do You Have a Claim Against Your Franchisor?
As a franchisee, there are few things worse than coming to the realization that you may need to sue your franchisor. Unfortunately, for many franchisees, this is reality, and taking legal action is the only way to protect their investment and their legal rights.
If you are at the point of considering franchise litigation, this article provides an overview of potential causes of action that franchisees can assert against their franchisors. To find out what claims you may have available, we encourage you to contact us immediately for a free consultation.
Common Claims in Franchise Litigation
Franchise Disclosure Violations
Under federal law and the laws of various states around the country, franchisors owe a duty to provide timely and accurate disclosures to potential franchisees. These disclosures must be made in the form of a Franchise Disclosure Document (FDD), which, depending on the state where you live, may need to be registered before the franchisor can begin selling franchises. Some common forms of franchise disclosure violations include:
- Your franchisor failed to provide you with an up-to-date FDD
- Your franchisor sold you a franchise too soon after providing you with its FDD
- Your franchisor included misrepresentations or exaggerations in its FDD
- Your franchisor underestimated the initial investment to open your franchise in Item 7 of the FDD
- Your franchisor provided an inaccurate or unsubstantiated “financial performance representation”
Breaches of the Franchise Agreement
While most franchise agreements are fairly limited in terms of establishing affirmative obligations for the franchisor, there are still typically several ways in which franchisors can breach the terms of their agreements. Some of these include:
- Your franchisor or another franchise encroached on your territory
- Your franchisor stopped providing products, services or support
- Your franchisor used marketing fund fees for other purposes
- Your franchisor wrongfully refused to renew your franchise
- Your franchisor wrongfully terminated your franchise agreement
Unfair Franchise Practices
In addition to committing disclosure violations and breaching the terms of the franchise agreement, franchisors can also be held liable for a variety of other unfair franchise practices. These practices vary widely and implicate a wide variety of state and federal laws, so it is critical that you discuss your situation with a highly experienced franchise litigation attorney:
- Accepting undisclosed rebates from vendors
- Acting in bad faith (even if not technically in breach of the franchise agreement)
- Antitrust violations
- Discriminating against individual franchisees
- Violating franchise, industry-specific and other state and federal laws
Of course, this is just a small sampling of the virtually innumerable claims aggrieved franchisees may have against their franchisors. If you believe that your franchisor has violated the law, violated your franchise agreement or otherwise acted improperly, it is important that you act quickly to protect your rights.
Jeffrey M. Goldstein represents clients in commercial complex litigation matters across the country. Mr. Goldstein is recognized as one of the top franchise litigators in the country. Mr. Goldstein has extensive experience in representing clients in state and federal courts in cases involving fraud, RICO, antitrust, encroachment, and wrongful termination. Mr. Goldstein also has an active practice in state and federal appeals cases. Mr. Goldstein practices as a franchise lawyer in complex litigation cases representing only franchisees and dealers. Although Mr. Goldstein appears in courts in a pro hac vice capacity depending on the state, he also has direct access to New York, Pennsylvania, Massachusetts, and the District of Columbia (DC), Washington, where holds Bars for those states.
In addition to his litigation practice, Mr. Goldstein counsels and advises clients in franchise and distribution matters. Mr. Goldstein has represented clients across the United States in almost every leading franchise system. Mr. Goldstein also is retained to counsel many national independent franchisee associations. Mr. Goldstein has also served as an expert witness in several federal court franchise cases.
Mr. Goldstein graduated magna cum laude from Bucknell University with dual degrees in Philosophy and Economics in 1979. In 1983, he obtained his Juris Doctorate from Boston University School of Law, where he also simultaneously received his Masters Degree in Economics.
You can reach Jeffrey M. Goldstein at (202) 293-3947 or email jgoldstein@goldlawgroup.com. His firm's website is www.goldlawgroup.com.
The Goldstein Law Firm is one of a handful of law firms in the country that represents only franchisees & Dealers. Not every franchise lawyer is a franchisee lawyer. Almost all law firms specializing in franchise law represent either solely franchisors or both franchisors and franchisees, but not solely franchisees & dealers. The philosophy of The Goldstein Law Firm is that all of our franchise attorneys' effort should be focused on advocating for the rights of franchisees, not on cutting new law for franchisors who are very ably represented by the largest law firms in the world. The Goldstein Law Firm offers its franchisee and dealer clients a consistent and unclouded commitment to the cause of franchisees. On a national basis there are merely a handful of franchise lawyers who truly represent only franchisees & dealers. As a franchisee lawyer, Jeff Goldstein is one of these rare franchise lawyers who does not also represent manufacturers and franchisors.
GLF specializes in:
General Franchise and Distribution Antitrust violations
Franchise Price-Fixing claims
Wrongful franchise terminations
Franchise Encroachment claims
Franchise Territorial violations
Franchise Dual Distribution competition
Franchise Menu Pricing disputes
Unfair Franchisor competition
Franchise and Distribution Trademark violations
Franchise and Distribution Post-term covenant not to compete restrictions
Wrongful franchise default cases
Franchise Supplier overcharging claims
Franchisor tying arrangements
Franchisor Fraud and Misrepresentation Claims
Franchise Disclosure Document Defects
(202) 293-3947
In those cases in which Jeff is retained to litigate franchise law questions, he appears in courts around the country either in a Pro Hac capacity, or through his direct membership in the Bars of New York, Massachusetts, District of Columbia, Washington, and Pennsylvania.
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