Franchise agreements require equal cooperation from both the franchisor and the franchisee. When cooperation from the other party is no longer possible, you need an experienced advocate to assist you in resolving the matter. The commercial litigation lawyers at Stok Folk + Kon have been helping Fort Lauderdale businesses for over a decade. We provide skilled representation to both franchisors and franchisees. We work closely with our clients to help them seek the maximum benefit from their franchise agreement.Franchise Law in Florida
The relationship between franchisor and franchisee can be a complex one. Ideally, both parties benefit; the franchisor gets to expand the reach of its brand, while the franchisee welcomes the opportunity to own a business. This relationship becomes unbalanced, however, when one of the parties feels that it has been wronged. When either the franchisor or franchisee believes that the other is not holding up their part of the business deal, litigation may be the only solution.
There are a number of possible claims that a franchisor could bring against a franchisee. For instance, if a franchisee is allegedly failing to follow franchise protocols or poorly executing the operation of the franchise, the franchisor could bring a cause of action asserting that the franchisee is causing damage to the goodwill or reputation of the brand. When a former franchise owner terminates the contract and starts up his or her own business that is similar to that of the franchisor, the franchisor could have a claim for breach of a non-compete agreement.
Franchisors may also bring intellectual property claims against franchisees. Should the franchisee misappropriate the symbol or trademark of the franchisor in some way (making a symbol that closely resembles that of the franchisor, for example), the franchisor could bring an action against the franchisee. Other common claims brought by franchisors include: failure of the franchisee to pay marketing or royalty fees, failure to comply with post-termination requirements and general breach of contract claims.
Franchisees may also have claims against the franchisors. One such claim is fraud or misrepresentation. By bringing this particular claim, the franchisee asserts that the franchisor failed to disclose material facts during the sale of the franchise. The franchisee may claim that the franchisor omitted some crucial facts or information during negotiations that may have dissuaded the franchisee from entering into the franchise contract. One of the most common claims brought by franchisees is the breach of the implied duty of good faith and fair dealing. This claim often serves as a type of catch-all action for improper franchisor behavior. In asserting this claim, the franchisee insists that the franchisor is behaving in a way that prevents the franchisee from obtaining all of the benefits of their agreement. For instance, a franchisee may bring this particular claim if he or she feels that the franchisor’s protocols and operation procedures are too stringent and leave little room for discretion from the franchisee regarding how to operate his or her particular business.Regulatory Action Against a Franchise
Another type of litigation that can arise out of a franchise operation involves federal and state governments. Franchises have government regulations by which they must abide. If a governmental agency believes that a franchisor is not abiding by the applicable regulations, then the agency can take legal action against the franchise. Because franchise businesses operate in a wide range of industries (food service, hospitality, motor vehicle products and services, for example), there are industry-specific regulations by which a franchise must abide. There are also regulations such as the Federal Franchise Disclosure Act that address franchise operation specifically, regardless of the industry.Fort Lauderdale Attorneys Protecting Your Business Interests
Whether franchisor or franchisee, when your company is facing litigation in the Fort Lauderdale area, an experienced attorney can help you handle your business dispute strategically. Stok Folk + Kon offers steadfast and skilled legal counsel to clients in communities throughout South Florida, including Hollywood and Fort Lauderdale. Call us today at (954) 237-1777 or contact us to schedule a consultation.