Alternative dispute resolution, or ADR, is a
method for parties to a disagreement to settle the dispute without filing suit,
and with the help of a neutral third party. While it is not right for every
disagreement, a business litigation lawyer like the ones at Zarco Einhorn
Salkowski & Brito, P.A. can advise you as to whether ADR is appropriate in
your situation.
What Is Mediation?
Mediation of a business dispute requires a
neutral mediator to work with each party to reach a settlement that everyone
can agree on. However, if the parties do not agree upon a settlement, the
mediator does not have the authority necessary to impose an agreement.
Mediation is a non-binding process. As opposed to trials, which are public,
mediation is confidential and private. It is almost always less expensive than
a trial.
What Is Arbitration?
With arbitration, an arbitrator acts as judge,
evaluating evidence and making a binding decision. Arbitration is more formal
than mediation, and the arbitrator is appointed by agreement from the parties
to the dispute. With arbitration, rules of evidence differ from rules of
evidence in trials. Arbitration generally takes less time than a trial and
costs less. Unless provision for an appeal is included in an arbitration
clause, there is no appeal option.
What Are the Advantages of ADR?
A commercial litigation attorney can advise
you if ADR is to your advantage in a business dispute. Advantages of ADR
include:
- Multi-party dispute suitability
- Generally less time and money is required
- Confidentiality
- Better preservation of reputation
- Practical resolutions can be tailored to parties' needs
What Should I Do in the Event of a Business
Dispute?
If you find yourself involved with a
business-related dispute, your first step should be consulting with an
experienced commercial litigation attorney like the ones at Zarco Einhorn
Salkowski & Brito, P.A. In some cases ADR is the best way to proceed, but
that is by no means true in all cases. Business litigation in the court system
is sometimes the best way to solve a business dispute, and in these cases it is
critical that you have outstanding legal counsel.
Opening a franchise allows you to use
a proven business model, and for this reason alone franchises are popular. When
buying a franchise, you should have reasonable expectations about the
franchisor's profitability record, procedures, and ease of duplication of the
business model. Costs should be laid out in the all-important Franchise
Disclosure Document (FDD). A franchise lawyer like those at Zarco Einhorn Salkowski
& Brito, P.A. can help you understand the FDD.
Franchisors Not Necessarily Protected
by Franchise Disclosure Document
FDDs typically disclaim promises of
profitability. These documents are worded carefully to avoid promises of
profitability in general and related to specific circumstances of the franchise
sale. The FDD, however, is not a perfect shield for protecting franchisors from
franchisee claims if the franchise is unsuccessful. This is particularly true
if the franchisor gives financial performance representations that are not
included in the FDD.
Fraud Harder to Prove than Violation
of Florida Franchise Act
If a franchisor, outside the FDD,
makes representations about profitability and the franchisee relies on the
franchisor's words or conduct about profitability, the franchisee could prove a
violation of Florida's Franchise Act if he or she suffered financially based on
the representations. Proving fraud requires an intentional false statement on
the part of the franchisor and is more difficult to prove.
Buying from a New Franchisor
If you want to buy a franchise from a
relatively new franchisor, working with a franchise law firm like Zarco Einhorn
Salkowski & Brito, P.A. is a good idea. Disclaimers concerning guarantees
of profitability or warranties do not necessarily successfully fend off claims
by failed franchisees when the franchisor makes negligent misrepresentations.
If you are considering buying from a franchisor without a lengthy track record,
you should work with a franchise attorney to help you protect your interests.
Financial Performance Representations
Are Key
Experienced franchisors know that any
financial performance representations such as projections are risky.
Franchisors can be held personally responsible for misrepresentations if there
is no basis in fact for financial representations. Experienced franchisors
protect themselves legally, and every potential franchisee should do the same
by working with a franchise law firm from the very beginning.
If you're building a start-up company
you are rightfully excited about your venture. Don't make the mistake of
putting off intellectual property concerns until later. Without paying
attention to your company's intellectual property, you could inadvertently
cause growth of your business to slow or stop. An intellectual property lawyer
like those at Zarco Einhorn Salkowski & Brito, P.A. can be an invaluable
ally in protecting your hard work.
Originating an Idea Is Not the Same as
Owning It
If you are considering starting your
own business and are currently employed, do not use employer resources like
computers, fax machines, or photocopiers, in the development of any ideas that
could become protected intellectual property. Doing so could give your employer
reason to assert rights to that intellectual property. Even an unrelated new
venture could prompt action from a former employer and their business litigation attorney.
Securing Rights from Contractors Is
Critical
Use of contractors and outsourcing is
the norm today, and it is essential that you proceed with contractors only
after having an agreement addressing intellectual property rights. Without this
type of agreement, technology developed by your contractor could result in a
dispute over intellectual property ownership and a call from a business
litigation attorney. Having an intellectual property attorney create an IP
agreement for contractors is a very wise move.
Premature Disclosure Can Jeopardize IP
Rights
It is only natural that you are eager
to announce your ideas. But without careful planning, a public announcement
could hinder your ability to secure some intellectual property rights. As just
one example, disclosure of confidential information could jeopardize trade
secret rights, and public disclosure of an invention could result in loss of
patent rights outside the United States.
Not Staying on Top of IP Issues Can
Cause Big Problems
While inventing and creating are
exciting, intellectual property law often is not. But it is critical to the
success of your business that you invest in counsel on intellectual property
rights with an IP law firm like Zarco Einhorn Salkowski & Brito, P.A. Ignoring
mounting IP issues can cause problems with loss of rights and missed
opportunities.
The USA franchise lawyer has to have
broad knowledge of franchise laws in different states and how they affect
people who want to buy or sell a franchise. If you are considering going into
business by buying a franchise, working with a franchise lawyer from the
beginning will help you understand the many responsibilities you will have as a
franchise owner, and can prevent costly mistakes.
Capital Investment and Your Interests
Are Key
Before choosing a franchise, you must
fully understand what level of capital investment you can make. The cost of
buying a franchise varies tremendously, and you want a franchise that is
reasonable for your financial situation. Also, you should choose a franchise
that speaks to your interests. You will be spending considerable time running
your franchise, so it's important that you choose one that aligns as well as
possible with what you like to do.
The Franchise Application
When you choose a franchise, you will
have to complete a franchise application, which may ask for credit and
background information and see if you meet criteria set forth by the
franchisor. Franchisors must provide potential franchisees a Uniform Franchise
Offering Circular (UFOC) containing information about the franchise's history,
finances, contracts, and requirements. Having a franchise lawyer review the
UFOC with you is wise.
Franchisor Standards of Conduct
Franchisors are required under the law
to act fairly and "with good cause." They must follow standards in
the event of termination, non-renewal and changes in competitive circumstances.
The specifics of these laws vary from state to state, and that is another
reason to work with a franchise lawyer starting as soon as you decide to buy a
franchise.
Why It's Smart to Check out Franchisee
Law Firms
Franchisee law firms help potential
franchise owners understand their obligations and requirements in order to buy
a franchise. They can explain confusing terms in the UFOC and make sure you
understand any and all contracts you sign with a franchisor. And, should the
franchisor try to terminate your franchise improperly, your franchise lawyer
will have your back and help you ensure you exhaust all avenues of recourse.
Franchisee lawyers focus attention on
Item 19 in franchise disclosure documents (FDDs) which covers financial performance.
While not all franchisors provide Item 19 disclosures, a growing percentage of
them do, probably to help them stand out against other franchises competing for
buyers. Whether or not your franchisor includes Item 19 disclosures, your
franchisee attorney will demand clarity about earnings.
Becoming a Single Unit Operator
There are not as many single unit
franchise owners as there used to be. The trend toward multiple unit ownership
is strong, and it's not as easy to become a single unit franchise owner today.
However, that doesn't mean it's impossible. Improved access to credit may
benefit those who want to become single unit operators, but in reality, many
franchisors prefer working with only a handful of multi-unit franchisees to
dozens or hundreds of them.
Litigation and Healthcare Laws
Many franchise law cases in 2012 had
to do with the distinction between "franchisees" and
"employees," and your franchisee attorney should stay abreast of
current case law in this area. Additionally, new franchise owners must prepare
themselves for requirements of the Affordable Care Act, specifically
requirements for franchises with 50 or more full-time employees. Preparing now
can help things go smoother in 2014 when the law kicks into high gear.
The FTC and Franchises
The Federal Trade Commission regulates
franchises at the federal level, and your franchisee lawyer should stay up to
date on FTC rules and clarifications the FTC sometimes issues about their
rules. Often these rule interpretations have to do with geographic territories
and exclusivity that could affect your franchise significantly.
The "Accidental" Franchise
Sometimes people find themselves
operating as a franchise without even realizing it. If you are using someone
else's trademark for a fee, under certain state laws, you could be a franchisee
unintentionally. The FTC has a list of criteria that makes a business a
franchise, and if you are entering into a business that fulfills those
criteria, it may be subject to both federal and state laws governing
franchises. This is yet another reason to work with a franchise lawyer as soon
as you make the decision to become a franchisee.
Did you know there are nearly three
quarters of a million franchise-related businesses in the United States? Franchises
are appealing because they allow franchise owners to build a business on an
established brand. However, running a franchise comes with many restrictions
you might not face if you owned an independent business. You will pay fees to
the franchisor in order to use their trademark and business model, and both
parties sign a contract defining rights and obligations.
Protecting the Franchisor's Reputation
Because your franchise business stands
on the reputation of the franchisor, you will have to follow certain
contractual obligations to protect that reputation. You will probably have to
make your store look very similar, if not identical, to others in the
franchise, and you will almost certainly not be allowed to sell products other
than the franchisor's products. Employees will have to follow certain rules,
and you will have to get approval for advertisements.
Training and Who Pays for It
You and your employees will have to
undergo training on business operations. Most franchisors provide this for free
as part of your agreement. You may train at other franchise stores, or you may
go to a specific training location. Make sure the franchisee attorneys helping
you clarify who is paying for training before you sign the franchise agreement.
Franchises and Fees
Generally, franchisees pay periodic
royalties, which are calculated as a percentage of your sales, or as a
percentage of your profits. You will also pay a one-time up front fee to start
your franchise. Your franchisee lawyer should help you determine if you also
have to buy certain supplies from the franchisor. Anti-monopoly laws do
restrict franchisors' ability to force you to buy their products, however.
Franchisee Attorneys Should Be Helping
You from the Beginning
Franchise lawyers should be on board
with you as soon as you decide you want to buy a franchise. From helping you
understand franchise disclosure documents to dealing with problems like
contract termination, these legal professionals can prevent expensive mistakes
and help you get your franchise off to the best possible start.
Getting out of a franchise can be
complex and painful. Your franchise agreement may contain non-compete covenants
prohibiting you from owning a similar business for a year or more. If you want
to get out of a franchise, selling it is the easiest way, but that's not always
possible. Franchise attorneys in Miami can help you explore all your options
for getting out of a franchise.
Selling Your Franchise
Selling a franchise is different from
selling an independent business. Franchisors sometimes say they will help you
find a buyer if you want to sell, but when it comes down to it, they're often
not much help at all. What's more, many franchisors charge big franchise
transfer fees and fees for training new owners. It may sound counterintuitive
to have an exit plan when you first buy a franchise, but it's a smart move.
When Mergers and Acquisitions Affect
Your Franchise
Franchisees may call upon a franchise law firm when their franchisor is part of a merger or acquisition. When this
happens, the franchisee often feels like the business they have ended up with
is not the business they thought they were buying. When your franchisor is
taken over by new owners, your franchise may become a pawn in corporate games
you want no part of. A franchise lawyer can help you protect your rights when a
merger or acquisition changes your business.
When Termination or Non-Renewal
Threatens Your Business
Getting a termination notice from your
franchisor is like getting fired. You may have signed an agreement preventing
you from working in a similar business for a certain period of time after
termination, and this can seriously affect your ability to earn a living. A
franchise lawyer can help you understand what your options and rights are as a
franchisee. You may be able to stop the termination, or be awarded damages if
you were wrongfully terminated.
Work With a Franchise Law Firm From
the Beginning
Get your franchise off on the right
foot by working with a franchise lawyer from the beginning. You can prevent
problems and understand better how to proceed should problems occur.
