Negotiating and Drafting Franchise Agreements: Key Provisions and Negotiating Strategies

Personal Guaranty and Other Key Terms, Legal and Business Considerations

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Tuesday, February 7, 2023 (in 3 days)

1:00pm-2:30pm EST, 10:00am-11:30am PST

or call 1-800-926-7926

This CLE webinar will provide guidance to business counsel on how to negotiate and draft franchise agreements and ancillary documents. The discussion will include key issues for counsel to consider when advising clients concerning key provisions in the franchise agreement, negotiating strategies, dispute resolution, and other risk management strategies.

Description

Franchise agreements are highly regulated contracts that require careful drafting. The heart of every franchise contract is a trademark license, although not every trademark license is a franchise. Unlike other consensual business arrangements, to lawfully form a franchise, a franchisor must comply with a comprehensive pre-sale disclosure process. Additionally, compared to other business arrangements, franchises tend to be long-term contracts lasting 20 years or longer depending on renewal options, which makes it imperative that franchise agreements give the franchisor authority to require franchisees to modify their operations so that the franchisor can keep the brand competitive and relevant to consumers. Franchise laws regulate many substantive terms in franchise agreements like termination, dispute resolution, and transfer. As a result, it is essential that practitioners understand the complex regulatory landscape and wide array of legal issues in representing franchise parties in the negotiation and enforcement of franchise agreements.

While some franchisors may offer their franchises on a "take it or leave it" basis, most franchisors will entertain at least some negotiation of franchise contract terms. This program highlights the key provisions in franchise agreements and the terms most commonly negotiated by franchise parties in forming their relationship from the point of view of the franchisor and franchisee. Our panel will provide guidance to business counsel that identify factors influencing a franchisor's willingness to negotiate and a franchisee's relative negotiating strength. Our panel will then discuss typical negotiating strategies to key contract provisions including term length and renewal rights; fees payable to the franchisor; territorial rights and exclusivity; time frame for development; covenants not to compete; personal guarantees by franchise owners and indemnity obligations; transfer restrictions; the franchisor's right to make future changes to the franchise program; termination; and dispute resolution.

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Outline

  1. Overview of franchise registration and proper disclosure
  2. Franchise models
  3. Franchise documents
  4. Negotiating strategies
  5. Best practices for avoiding disputes and litigation

Benefits

The panel will review these and other important issues:

  • What is a franchise and how do franchise laws regulate franchise relationships?
  • Common contracts used by franchise parties to define their relationship
  • Why negotiate? A franchisor's willingness to negotiate and a franchisee's negotiating strength
  • The franchisor's and franchisee's objectives in negotiating key franchise agreements provisions:
    • Term length and renewal rights
    • Fees
    • Territorial rights and exclusivity
    • Development time
    • Covenants not to compete
    • Personal guarantees by franchise owners and indemnity obligations
    • Transfer restrictions
    • Franchisor reservations of rights
    • Termination
    • Dispute resolution

Faculty

Ashton, Brooke
Brooke Ashton

Shareholder
Fetzer Booth

Ms. Ashton’s practice areas include business law, franchise law, contracts, and other related fields of law. She...  |  Read More

Lusthaus, Julie
Julie Lusthaus

Franchise Attorney
Lusthaus Law

Ms. Lusthaus’ practice focuses on franchise and general business matters. She represents a broad spectrum of...  |  Read More

Spandorf, Rochelle
Rochelle (Shelley) Spandorf

Partner
Davis Wright Tremaine

Ms. Spandorf focuses her practice on business franchise and distribution issues, representing franchisors,...  |  Read More

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You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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