Minneapolis franchisee lawyer Ron Gardner discusses why it is beneficial to a Franchisee Association to have a lawyer.
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There are a lot of people who come together to form franchisee associations who don’t stop and think about what it is they’re doing or why they’re doing it. Remember that the franchise relationship is purely a legal one. It is driven by the contract that exists between the franchisee and the franchisor as it is affected by the state law that may be in play in the particular states that are at issue depending where the franchisor sits and where the franchisee sits. When people come together as a franchisee association and they want to take some sort of action, collective action, whether it’s legal action, litigation, whether it’s to approach the franchisor on a negotiation, whether it’s a self-help. I’ve had people who’ve decided they don’t want to pay their royalties they’re going to go on a royalty strike. Each one of those issues require or should require because of the legal nature of the franchise relationship a lawyer to counsel people about that.
For instance, royalty strikes are illegal and people are going to get hammered because of antitrust laws if they do that. Well, people who don’t have a lawyer may not know that and they feel like well, the franchisor didn’t do this for us so we’re all going to withhold our royalties that seems like a fair thing to do. It may be a fair thing to do, it’s not a legal thing to do and without getting good legal counsel you’re likely to fall into doing something that’s not going to be as helpful as you hoped it would be. So a franchisee association should make sure that they get good competent legal counsel to help them navigate the pitfalls of the things that they might do in order to get their franchisor engaged with their issues.