What Should Franchises Look for in a Law Firm? Whether you're a franchisor or a franchisee, follow these experts' words of advice.
By Hayden Field •
This story appears in the December 2019 issue of Entrepreneur. Subscribe »
1. Find a Good Attorney -- Now!
From J. Mark Dady, franchisee lawyer and managing partner, Dady & Gardner, P.A.
My practice is focused almost exclusively on the representation of franchisees, helping prospective ones review their franchise disclosure document and negotiate changes to their franchise agreements. Clients also come to us when they're having an issue with their franchisor: They might feel the franchise opportunity was misrepresented, or they have an issue related to default notices, termination, or nonrenewal.
A lot of franchisees think that getting a lawyer involved dramatically escalates things. My advice: Don't worry about that. Your franchisor has a lawyer, so you should have one, too. It's a good idea to retain counsel sooner rather than later. We get a lot of calls from folks who say, "Hey, I got this default notice from my franchisor, and I need some assistance," but they're calling 29 days in with a 30-day cure period. When your counsel has more time, there are more options.
When you do start considering firms, make sure you choose someone with experience in franchising. Just because you've used a lawyer for a lease review or a corporate formation doesn't mean they know franchise law. And remember: Some lawyers represent both franchisors and franchisees. Find someone who doesn't just dabble. You want someone whose primary focus is representing and advocating for franchisees.
Related: How to Find the Right Payment System
2. Build a Relationship You Can Trust
From Eric Lavinder, vice president of franchise development, Saladworks
Philadelphia-based fast-casual chain Saladworks has 96 stores serving up more than 100 million salad combo options. Five years ago, it partnered with local law firm Spadea Lignana because its attorneys promised…
1) Firsthand experience
One of Spadea Lignana's founders and partners worked in franchise sales before pivoting to law. "Things in franchising are not always cut-and-dried, so it helps to have somebody who really knows the challenges," Lavinder says.
2) Tech savvy
"Time kills deals, so speed is a necessity," Lavinder says. That's why Spadea Lignana integrates with Saladworks' CRM. The firm can update franchisee applications, nondisclosure agreements, and FDDs in real time, giving franchisees (and potential franchisees) improved access and communication.
3) Accountability
Lavinder says Spadea Lignana helps him stay honest and organized. "I move so fast that I can make a mistake, and they keep me from making that mistake," he says.
Related: What Franchises Should Look For In a Marketing Firm
3. Unexpected Success
From Chris Kenny, managing partner, Level 5 Capital Partners, and CEO, Big Blue Swim School
What he expected: When private equity firm Level 5 Capital invested in Big Blue Swim School, it wanted to turn the company into a franchise system. So it hired global law firm DLA Piper to help create a long-term franchisor road map.
What he got: Franchising can require complex litigation across all 50 states, and Kenny was delighted by how DLA Piper helped him simplify such an overwhelming process. "We were able to really dive in and nail what our system needed to look like," says Kenny. "We ended up with a set of documents where we know everything was done for a reason."
