Franchise & Distribution Industry Group
Franchise
For those considering franchising, is your company ready? Will franchising work in your industry? Do you have the infrastructure in place to support a franchise system? Are you prepared for the transition from running your business to running a franchise system? Have you begun thinking about your exit strategy? Is there a way to achieve your goals without the legal burden of franchising?
For existing franchise companies, are you taking advantage of all your opportunities to grow and expand your franchise system? Is your franchise agreement maximizing your rights and protections in your relationships with franchisees? Are you fully complying with your obligations under federal and state regulatory systems? Do you intend to sell the system in the near future? Are you properly handling disputes with franchisees? Are you taking full advantage of other industry professionals to create high-quality operational manuals, to provide meaningful franchisee training programs, to obtain proper insurance, and to reduce your tax burden?
At Graham & Dunn, our approach to franchising starts with your business objectives. We work hard to understand your goals, your needs, your system, and your culture, and then we help you create business and legal strategies to achieve those objectives. We’ve worked with franchise systems in a broad range of specialty industries, including restaurants and fast food, retail gasoline, hotels, ice cream and frozen yogurt, trash removal, residential real estate, home construction services, handyman services, and retail coffee, among others. Across all of these businesses, we understand that franchisors don’t just need legal advice—they need business advice, and everything we do is aimed towards helping you get as much value as possible out of your system. Sometimes, that means advising clients that they shouldn’t franchise at all, because there’s an easier way to achieve their goals, or because franchising simply isn’t the right vehicle to build their business. There is no single formula for success, and we tailor our advice and approach to your individual industry, company, and goals.
Our franchise practice includes expertise in drafting agreements and disclosure documents, handling registrations and regulatory filings, advising franchisors on the legal restrictions imposed on their relationships with franchisees, and litigating and arbitrating disputes with franchisees, vendors, suppliers, and others. That range of experience allows us to work with you to form your company, to build your brand and system, to handle disputes that come up, and when you’re ready to retire or move on, to help you sell your company or transition it to the next generation.
Distribution
Our distribution experience extends beyond franchise systems into a variety of other industries, including alcoholic and non-alcoholic beverages, petroleum, wholesale and retail food products, clothing, retail equipment, manufacturing equipment, restaurants, travel services, outdoor advertising, biofuels, and natural resources, to name a few. Our work with a range of industries gives us insight beyond the basic terms of your business relationships, and allows us to advise you about how to structure your company, how to grow (or get smaller) intelligently, how to protect your business assets, and how to minimize your legal exposure.
Our distribution professionals handle contract drafting and review, regulatory filings and interactions with regulatory agencies, and litigating and arbitrating disputes involving suppliers, distributors, retailers, and vendors.
Transactions, Agreements, and Disclosure Documents
When franchising is the right tool to grow your concept, we work hand-in-hand with you to build a system that not only meets your legal obligations, but that achieves your business ends. We draft franchise agreements, franchise disclosure documents, area development and master franchise agreements, subfranchising agreements, broker and area representative agreements, software license agreements, and anything else that’s necessary to create, establish, and grow your system.
For distribution clients, we prepare manufacturing agreements, distribution agreements, supply agreements, dealership agreements, co-branding agreements, licensing agreements, sales agreements, broker and area representative agreements, and many more. As with franchising, many distribution industries have specialized statutes or regulations that affect contract terms and that create rights and obligations the parties may have never considered. Our knowledge of and ability to understand that legal overlay helps us structure your relationships to allow you to grow and develop your business while avoiding the pitfalls of your industry. By focusing on your business objectives, we provide practical, real-world advice that accounts for—but does not shy away from—the risks that all business entails.
Regulatory Compliance and Relationship Advice
We handle franchise registrations and renewals, amendments, salespersons filings, advertising compliance, and compliance audits and counseling. In regulated non-franchise industries, we prepare and file licensing and other applications, and deal with regulatory agencies. We also counsel clients on enforcement actions by government authorities, and our contacts within the regulatory agencies in a variety of industries allow us to resolve problems quickly and efficiently.
We counsel both franchise and distribution clients on the legal requirements and restrictions that apply to termination, renewal, and other rights and obligations in their relationships with franchisees, suppliers, distributors, and retailers. We direct clients around conflicts before they occur, nipping in the bud what could otherwise become costly and time-consuming litigation.
The law of franchising and distribution has changed significantly in recent years, and our ability to stay on top of it all means that you don’t have to.
Litigation and Dispute Resolution
Litigation and disputes are an unfortunate reality of doing business. While we design our advice to prevent disputes whenever possible, we continue working with you when litigation is necessary or unavoidable.
We don’t fight for the sake of fighting. We’re not going to waste your time or money on unnecessary discovery disputes, endless depositions, or motions that won’t advance your position. In almost all cases, we limit staffing to one or two attorneys, plus a paralegal, and we always look for opportunities to have the lowest-cost person possible perform the necessary work.
Litigation is as much art as science, and we wrote the book on franchise litigation in Washington (we’re not kidding—just ask us, and we’ll help you get a copy). Knowing the law is a must, but it’s only the beginning. Beyond our expert knowledge in franchise and distribution law, we know that every piece of litigation has its own facts and personalities. Rather than using a one-size-fits-all approach, our experience allows us to evaluate each unique situation individually, and to construct the strategy with the best chance of success, always taking into account your business objectives. Sometimes that means a long, hard-fought battle. Sometimes that means an early settlement. Sometimes that means seeing it through because the underlying principle of defending or pursuing a claim is as important to your business as the actual outcome.
When litigation begins, we share our insights with you and work together to craft a comprehensive approach that is always directed towards accomplishing your goals, not getting our name in the newspaper.
Over the years, our successful litigation in franchising and distribution has included:
- Defending franchisors and manufacturers in claims based on the termination of franchise, distribution, and dealer agreements.
- Defending franchisors in actions by single and multiple franchisees claiming violations of statutes governing franchise registrations, disclosures, and misrepresentations
- Recovering unpaid royalties, marketing fund contributions, liquidated damages, and other debts from terminated franchisees, dealers, and retailers.
- Prosecuting claims on behalf of franchisors and manufacturers against trademark infringers, cyber-squatters, and others violating our clients’ rights in their trademarks and service marks.
- Defending product liability actions, including a multi-million dollar class action alleging personal injury and property damage against a manufacturer, after the manufacturer voluntarily recalled its admittedly faulty product.
- Defending claims by government regulators alleging violations of franchise registration and disclosure laws, antitrust laws, product labeling restrictions, and advertising requirements.
- Representing franchisors, manufacturers, and distributors in commercial claims brought by or against vendors, suppliers, and independent contractors.
- Representing franchisors in actions based on franchisees’ efforts to break away from the franchise system.
- Assisting manufacturers and franchisors to maximize their insurance benefits through our extensive experience with insurance coverage matters.
A Broad Base of Resources
We’re not just franchise and distribution specialists. Graham & Dunn is home to a broad base of legal professionals, so in addition to your franchise and distribution needs, we can help you with your corporate formation and governance, trademarks, copyrights and other intellectual property, labor and employment matters, tax issues, securities filings and transactions, real estate and leasing transactions, insurance claims, negotiations with lenders and creditors, environmental and natural resource matters, and even your personal estate planning and wealth management. And if for some reason it doesn’t make sense for us to handle your needs here, we’ll refer to our extensive contacts in the local, regional, and national legal communities to find you the help you need.
Everyday Advice
Call us. We answer our own phones. If we miss your call, we’ll call you back. Really.
We understand that your business requires you to make quick decisions, often with incomplete or imperfect information. We’ll tell you what legal requirements and restrictions apply, but we’ll also help you quantify the risk involved. It’s one thing to know the speed limit, but it’s something else entirely to know where the speed traps are. Our combined experience with litigation, regulatory compliance, registration and disclosure obligations, and business agreements gives us the unusual ability to predict not only what can happen, but what will happen.
We get excited by our clients’ success, and all of our advice is based on the expectation that we will have a long-term relationship with you as your system or company grows and prospers. We look forward to working with you.
GROUP CO-LEADERS: Douglas C. Berry, David M. Byers
