Certain states require pre-sale registration of franchise documents by state authorities. We assist our clients in obtaining the necessary registrations so that they can legally sell in the each jurisdiction. We also assist our clients in negotiating the terms of the franchise and memorializing the terms in any necessary amendments or addenda to the franchise agreement,
When a franchisee is not in compliance with his or her obligations under the franchise agreement, the decision to terminate, along with a thorough analysis of all pre-termination options, is critical. A termination, like any decision to end a long-term relationship, has many implications. In most cases, there are options short of termination which, under the right circumstances, may motivate a franchisee to cure, and thereby save the relationship and protect the cash flow associated with the unit. In-term actions seeking damages for breach of the agreement along with attorneys’ fees are often an effective tool to garner compliance. We have worked through literally hundreds of franchise disputes and have a track record of achieving prompt resolutions of even the most acrimonious disputes.
Sixteen states have laws that govern certain aspects of the franchise relationship, including termination or non-renewal of a franchise. The practical result of such statutes is that, as the New Jersey Supreme Court stated, “…once a franchise relationship begins, all that a franchisee must do is comply substantially with the terms of the agreement, in return for which he receives the benefit of an ‘infinite’ franchise – he cannot be terminated or refused renewal.” New Jersey courts even go one step further to ensure that New Jersey franchisees will receive these protections by refusing to enforce forum selection clauses which require litigation to be conducted outside of New Jersey (usually in the franchisor’s home state).
It is important to note that if a state relationship statute applies, it supersedes any less-stringent requirements in the franchise agreement. Additionally, many state relationship statutes impose a mandatory cure period that may serve to extend or otherwise affect the franchise agreement cure period.
Our franchise attorneys have extensive experience in negotiating the terms of renewal and if need be enforcing the post-termination or expiration rights contained in the franchise agreement.
