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Seattle Franchising Law Blog

Fichter Receives Award for Writing

The Bundy Law Firm is proud to that its associate, Caroline Fichter is the 2016 recipient of the American Bar Association Forum on Franchising's Chair's Award for Substantial Writing Work or Presentation for her law journal article "Surviving the Tempest: Franchisees in the Brave New World of Joint Employers and $15 Now." In the article, Caroline and her co-author, Erin Conway of the Garner & Ginsburg firm in Minneapolis, explore the ramifications of recent national labor board decisions and minimum wage increases from a franchisee perspective.

After Buying a Franchise, Two More Families Facing Bankruptcy

Another day and two more prospective clients calling for help because they bought franchises. One in the senior health care industry; one in the men's hair care industry. Both suffered devastating losses. In under two years, one lost $600,000; the other "only" $100,000. In both cases, they have nothing left and I had to talk to them about consulting a bankruptcy attorney.

Corporation or LLC - What State is Right for Your Entity?

Everyone planning to set up a new corporation or LLC faces the question of what state should they form the entity in. You read on the Internet or see ads on television about the "wonders" of incorporating in some particular state. The half of the truth that the proponents generally don't tell you is what can later bite you.

Buying a Franchise--What Are You Getting For Your Money?

Every day people eager to own a business invest $500,000 to a million dollars in franchises where the FDD said the top of the range for "estimated initial investment" wasunder $250,000-and where the "initial franchise fee" is only about $35,000. When buying a franchise, the first question they should be asking is what are they getting for all that money?

Buying a Franchise - Beware of Empty Promises

If you are considering buying a franchise, you need to beware of empty promises from the franchisor. Over the last few years, franchise agreements have become extremely one-sided. Recently, many franchisors are making no enforceable promises to provide franchisees with any support or assistance after their business opens.

Franchise Dispute Resolution - Is Arbitration Best?

When reviewing a business contract or franchise agreement for a client, we often read the dispute resolution section first. That section describes the process the parties will use to resolve disputes and what will happen if either party decides to file a lawsuit. Many agreements provide that any disputes will be resolved through binding arbitration, a private dispute resolution process where the parties hire an arbitrator to act as a private judge and resolve their dispute. Generally, the arbitrator can do every thing that a judge can do including deciding pre-trial issues, hearing evidence and deciding the case. An arbitrator can order the parties to pay damages, fines and legal fees. One of the major advantages of arbitration is that, generally, the parties may not appeal the arbitrator's decision, meaning for better or worse, the outcome is final.

Problems With Your Franchisor--Beware Of Signing Amendments

If you are experiencing problems with your franchisor, beware of signing amendments to your contract or any other document purporting to resolve the problems. It is common for franchisors to give you a small concession to "help" you-but to extract a general release of claims and various factual "representations" in return.

When Buying a Franchise, Think Before You Convert

When buying a franchise, think before you convert your existing business to a franchise.  If you have an existing business, you may discover opportunities to convert your business to a franchise--to get the benefits of a "well known brand", to gain "purchasing power", or to gain advertising and support.  You may even be tempted because of the attractiveness of the package.

Why Have a Corporation or LLC if You Don't Use It?

Why would you spend the time and money to set up a legal entity--a corporation or LLC (Limited Liability Company)--if you did not plan to use it?  It seems that almost weekly we learn that people have a legal entity they paid for--but they never took the steps necessary to properly transfer their business or its assets into the entity. 

Buying a Franchise--Lies, Damned Lies and Statistics

In buying a franchise, beware of the lies, damned lies and statistics--about 90% success rates, among other things.  At some point in the process of buying a franchise, someone will probably tell you that 90% of all franchises succeed. That person is lying. Years ago, the Department of Commerce produced a "study" with that statistic and unscrupulous franchisors and franchise brokers have been relying on it ever since.

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