You did what? Potential Pitfalls for the Franchisor


The purpose of this paper is to help the competent business attorney who does not yet have franchising experience anticipate and deal with potential pitfalls faced by small franchisors. The structure of the paper is to first deal with the practical aspects of handling a small franchisor’s crisis as its attorney and counselor within the bounds of ethical representation.

As discussed below, the small franchisor is a more fragile enterprise and is subject to more potentially fatal threats than is commonly understood. Successfully guiding the small franchisor through its legally treacherous franchise expansion and possible “bet-the-system” franchise situations is different from the average attorney’s corporate representation or business litigation experience.

The second portion of the paper outlines the different pitfalls a small franchisor faces and presents a treatment and preventative course of action for each. If there is anything that sets “Franchise Law” apart, it is its collection of many different legal issues usually left to specialists. Each of the listed pitfalls is the subject of numerous articles in its own right. The hoped-for effect of listing and briefly discussing them is to warn the novice franchisor attorney of their existence so he or she can judge which need to be prepared for ahead of time in their particular franchisor’s circumstances.

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