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Seattle Franchising Law Blog

Buying a Franchise - Beware of Freedom of Contract

When buying a franchise, you should beware of "freedom of contract". Freedom of contract is a bedrock concept of the legal system. It presumes that every person understands every word of every contract and that their "self-interest" will cause them to not sign unfair or ill-advised contracts.

Best Practices - Don't Use the Computer for Personal Matters

If you follow best practices as a franchisee, you will never use the computer for personal matters. It is tempting and far more convenient, but extremely dangerous. Most franchise agreements give the franchisor "unfettered" access to your computer and all information on it. If you email your sister complaining about how the franchisor treated you, the franchisor has the right to read it, and you should assume they will.

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.

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