Practice/Industry Group Overview
Greenberg Traurig attorneys have represented clients in establishing franchise and distribution operations in all 50 U.S. states and internationally. With franchise and distribution-focused transactional, litigation and intellectual property law experience, Greenberg Traurig’s franchise and distribution team has a thorough understanding of both the legal and business aspects of franchising and distribution. Our goal is to establish long-term client relationships defined by reliability, responsiveness and trust. Greenberg Traurig’s diverse practice includes the representation of regional, national and international franchisors, franchisees, manufacturers and distributors in virtually every aspect of franchising and distribution, ranging from individual entrepreneurs to internationally recognized public companies.
In addition to offering clients practical franchise and distribution-related legal advice, we draw upon our international platform of experienced Greenberg Traurig attorneys who focus on areas of law relevant to franchising and distribution, such as antitrust and trade regulation, tax, finance, government relations, litigation, corporate and securities, environmental, labor and employment, intellectual property, technology, real estate, restructuring and other matters.
We provide training on all areas of franchise law to help clients stay up to date and compliant with the most recent laws and regulations related to their business, including new Federal Trade Commission regulations and the implications to franchise systems. We have worked with franchise regulators in every registration state – experience that helps us to facilitate an expedient and seamless registration process.
Should a client have an issue, our team includes experienced litigators skilled in effectively and efficiently representing franchise and distribution companies in litigation, arbitration, mediation and other alternative dispute resolution procedures.
Greenberg Traurig’s transactional Franchise & Distribution Practice primarily involves the representation of franchisors, manufacturers and distribution companies, however we also represent multiple outlet, area development and master franchisees, and franchising joint ventures on a wide variety of franchising, distribution, corporate, real estate, technology, finance, environmental, tax and other matters. We assist clients with virtually every aspect of the development and ongoing operation of a franchise or distribution system. We understand that each franchise and distribution system is unique and that one size does not fit all, therefore, our attorneys custom-tailor a plan based on the client’s business and in a manner that will help the client realize his or her short- and long-term goals.
Our key franchise and distribution formation and support services include:
- Structuring franchise and distribution programs (e.g., single unit with or without area development rights or master franchise)
- Assisting with expansion into foreign countries through master franchising, area development relationships, joint ventures and other structures
- Preparing franchise disclosure documents, state registration of franchise offers, and counseling on compliance with all elements of disclosure regulation and franchisee recruitment
- Structuring and documenting franchise and distribution systems, including drafting agreements and collateral documents
- Advising on structuring initial franchise fees, royalties and advertising funds
- Advising on compliance with advertising programs and materials and Internet advertising restrictions directed at the offer of franchises and business opportunities
- Advising on branding and franchise development, as well as trademark clearance and prosecution, and intellectual property protection for domestic or international systems
- Advising on the establishment of franchisee or distributor territories and exclusivity
- Counseling clients on franchise and distributorship relationship issues, including terminations, transfers, buy-backs, restructurings and conversions
- Counseling on compliance with federal and state relationship regulations
- Preparing and filing state business opportunity registrations
- Advising on structuring distribution relationships that avoid regulation under state and federal franchise disclosure and business opportunity laws
- Restructuring existing franchise and distribution relationships
- Addressing relationship problems and advising on ways to enhance franchise and distribution relationships
- Developing supply programs for franchisees and distributors
- Advising buyers of area development and master franchises, as well as joint ventures, and negotiating related agreements
- Conducting due diligence on the acquisition or sale of mature franchise or distribution systems
In some instances, our best advice to our clients is to not structure a business as a franchise. Franchising is not appropriate for all businesses. When this situation arises, we work with the client to establish a business format that will allow the client to achieve his or her business goals.
Greenberg Traurig’s franchise and distribution litigation team includes experienced litigators who represent franchisors and manufacturers in wide-ranging litigation in state and federal courts across the country, as well as in arbitration proceedings and mediations. Our litigation team works closely with our transactional attorneys and regularly counsels clients on franchise matters before litigation and in connection with strategic planning to properly address and contain matters before the onset of litigation. The firm’s global platform distinctively positions us to address the needs of our clients and we have the experience to provide clients with quality representation in an efficient and cost-effective manner.
Greenberg Traurig’s franchise and distribution litigation team assists franchisors and manufacturers in an array of termination-related disputes, including:
- Breach of contract
- Trademark and copyright infringement
- Termination-related claims
- Implied covenant of good faith and fair dealing
- Breach of fiduciary duty claims
- Restrictive covenants
- Transfer issues
- Discrimination claims
- Registration and disclosure violations
- Enforcement of systems standards
- Vicarious liability
- Consumer fraud
We also represent clients in franchise and distribution cases involving a variety of potential claimants, including actions brought by:
- Single franchisees or distributors
- Groups of franchisees or distributors
- Franchisee or distributor associations
- Franchisee trusts
- Suppliers to the franchise system
- Area franchisees/area developers
Trademarks and Other Intellectual Property
Our lawyers concentrate their practice in trademarks, patent, copyright and trade secret law, including computer software, licensing, advertising, the development of a competitive brand image, labeling, trade dress, trade secrets, the licensing of collateral products, trademarks, service marks, names, likenesses and logos – the full range of matters associated with intellectual property and technology law. We provide clients with the capabilities and reach of one of the largest international trademark prosecution, portfolio management and counseling practices in the United States. Our team offers clients a wide range of services in virtually every aspect of developing, maintaining, enforcing and growing a worldwide brand, including: counseling on the selection, use and protection of trademarks and service marks, filing and prosecuting applications for registration of marks, advice on unfair competition and infringement matters relating to trademarks and trade dress, representation in opposition and cancellation proceedings before the Trademark Trial and Appeal Board and in infringement litigation in federal and state courts, domain name protection and enforcement, copyright counseling and protection, and Internet-related counseling and protection.
After developing the franchise or distribution model, our attorneys begin drafting the necessary documentation, which for franchise programs includes the Franchise Disclosure Document, franchise agreement and area development addendum, if required. For distribution programs, we begin drafting the necessary documentation, which includes distribution, external sales representative, independent contractor and/or employment agreements. We also prepare all other ancillary documents, such as nondisclosure and non-competition agreements, confidentiality agreements and personal guaranties. Our attorneys strive to create agreements that not only provide franchisors and manufacturers with the flexibility, control and protection they need, but that are commercially reasonable and marketable. Lawyers with specific experience may work with us to prepare ancillary documents, such as real estate leases and subleases, collateral assignments of leases, equipment leases, construction agreements, deposit and commitment agreements, Internet policy and procedure agreements, and software and trademark licenses.
Franchise Sales Training
Once all of the documentation is prepared for a franchise program, we offer to conduct a training seminar for the client’s franchise sales staff to familiarize the franchisor with the many intricacies and issues that arise in connection with the offer and sale of franchises. The seminar highlights the legal boundaries of permissible versus illegal franchise marketing activities. In addition, our attorneys provide practical advice regarding franchise sales methods and record keeping practices, as well as ongoing consulting services with respect to various franchise issues as they arise.
Many states have franchise registration or business opportunity exemption requirements that a franchisor must satisfy before it may offer to sell a franchise in those states. We prepare and submit the necessary registration and exemption applications, and work directly with state regulatory agencies to obtain an effective franchise registration or business opportunity exemption as quickly as possible. Over the years, we have worked with franchise regulators in every state that requires registration. Our attorneys have developed excellent working relationships with state regulators, which often helps us to facilitate an expedient and seamless registration process. Prior to receiving an effective registration or exemption, we work with our clients to ensure compliance with advertising restrictions (Internet, programs and materials) directed at the offer of franchises and business opportunities. In addition, we prepare annual registration renewals and post-effective amendments on an as-needed basis.
Continuing Guidance and Support
Once the franchise or distribution system is operational, we provide continuing guidance and support pertaining to a variety of issues that invariably arise in the franchise or distribution context. We advise our clients on the requirements and prohibitions of state relationship laws, which regulate the ongoing relationship between a franchisor and franchisee and a manufacturer and distributor. Relationship laws typically govern issues such as terminations, renewals and transfers. We dedicate a significant amount of time and resources to ensuring that we are current on the latest franchise and distribution trends and developments. We follow legal developments affecting the franchise industry or distribution relationships and continuously review our documents to ensure that they are up to date. We also maintain contact with our clients, notifying them of any recent developments that may be of interest.
Representation of Noncompliant Franchisors
Occasionally, companies seek our advice after encountering legal problems stemming from the failure to comply with state and federal franchise regulations. The penalties for violating state and federal franchise laws can be substantial. Often, these companies simply were unaware that their business format, or the opportunity they were selling, actually constituted the sale of a franchise. In those circumstances, we rely on our strong working relationships with state regulatory agencies to bring these franchise systems into compliance with minimal negative consequences.
International Franchising and Distribution
Our wide-ranging Franchise & Distribution Practice helps clients expand worldwide and includes not only U.S.-based clients seeking to expand abroad, but also foreign clients seeking to expand into the United States and other cross-border markets – and in some cases within their own countries. Whatever the scenario, trans-national franchise and distribution relationships differ in important respects from domestic arrangements. We have extensive experience in structuring, negotiating and documenting international master franchise and area development relationships, joint ventures and other distribution relationships around the globe.
U.S. authorities have become increasingly active in Foreign Corrupt Practices Act (FCPA) enforcement. We are able to assist both large and small U.S. and multinational franchise, manufacturing and distribution companies with:
- Internal investigations of questionable activities or undergoing regulatory investigations
- Due diligence advice (and conduct due diligence) relating to international franchise and distribution transactions and business operations
- The construction and implementation of anticorruption policies and procedures consistent with best practices
- Interacting with DOJ, SEC and foreign regulators to help mitigate potential FCPA exposure and negotiating the best resolution to such matters
Franchise and Distribution Mergers & Acquisitions
Greenberg Traurig’s multi-disciplinary approach has proven invaluable to clients of all sizes and in an array of industries by bringing together attorneys from the firm’s Franchise & Distribution and Mergers & Acquisitions Practices. We come to the table with extensive hands-on experience with M&A transactions involving franchise, manufacturing and distribution companies.
Understanding the franchise regulations and issues involving a franchisor’s or manufacturer’s short- and long-term relationships with its franchisees or distributors are critical to all aspects of the franchisor’s or distributor’s business. They are also critical to all aspects of the purchase or sale of the franchisor or manufacturer. Our understanding of how the franchise or distribution aspects of the business impact each provision in the acquisition agreement makes Greenberg Traurig uniquely suited to represent buyers and sellers of franchise, manufacturer and distribution companies.
Antitrust and Trade Regulation
Antitrust and trade regulation law, both domestic and foreign, inevitably and often impacts franchise and distribution relationships, with many antitrust principles applying specifically to the relationship between manufacturer and distributor, franchisor and franchisee, and seller and buyer. Our antitrust lawyers are involved regularly in counseling clients on the antitrust aspects of distribution arrangements and in litigating those issues.