If you have a franchise dispute, you need a good lawyer. That’s one takeaway from the latest disagreement surrounding ABC’s franchise The Bachelor. According to news reports, the host of the show, Chris Harrison, will step down and be replaced by two co-hosts next season. Apparently, the separation is not entirely amicable, with Harrison having hired an attorney. Although it is unclear what, if any, legal action he is taking, reports suggest he was unhappy with how he was treated on the show.

Franchise disputes can involve any business, from small firms to large corporations like ABC. That’s why you need an experienced attorney like Timothy Coons to represent you when conflicts arise, such as:

An Unsuccessful Business Model

No franchise, despite how promising it may sound, is guaranteed success. In fact, many franchise business models are flawed and, at best, generate a good income for only certain individuals in their system. These people tend to succeed not because of the business model itself, but because they are good business leaders with dynamic personalities, high-quality business networks, and good referral resources. By the same token, the mere presence of an unsuccessful business model probably is not a reason in and of itself to walk away from the franchise after signing the agreement.

Excessive Revenue Sharing

All franchisees must pay part of their gross revenue (not profits) to the franchisor. This amount can be as much as 10 percent and can sink a franchise that is not doing well financially. There can also be late fees, penalties, and interest if a franchisee misses a payment.

A Bad Commercial Lease Agreement

Most franchisees must buy or lease space at their own expense to operate their business. Commercial leases involve costs that can be burdensome, including security deposits, tenant improvement costs, and common area expenses. This means it is easy to overcommit to an unaffordable commercial space, especially for new businesses.

Employee or Partnership Issues

Embezzlement, lack of skills, lawsuits against the business, non-compliance with franchise rules, and other employee-related issues often come up when running a franchise. These issues can be difficult to deal with for any company, but especially for a new franchise that is having trouble staying afloat. 

Partnership Issues

Many franchisees go into business with a partner, which can lead to disputes over a number of issues. These can include, for example, how much money to invest in the business, how to properly market the product or service, or how much time each partner is required to spend on business-related tasks. These partnership issues can make running a franchise difficult or impossible if not addressed early.

Lack of Support from Franchisor

Franchisors do not always provide the level of support that their franchisees expect. For example, a franchisor could be experiencing high turnover or simply not know how to run a business in a particular field. A high level of support is critical for many franchisees, especially if they are new to the business. Without it, a franchise can have trouble staying financially solvent or even getting started.

Breach of Good Faith and Fair Dealing

Sometimes a franchisee or franchisor accuses the other of not acting in good faith. This can quickly sour the relationship and encourage one or both parties to abandon the agreement.

How Franchise Disputes are Resolved

A franchise agreement might stipulate how disputes are to be handled. For example, some agreements require mediation or arbitration. Even if the agreement does not contain such a requirement, the parties may want to enter into mediation or arbitration voluntarily. These types of alternative dispute resolution (ADR) can have several advantages over litigation, including choice of the adjudicator, increased privacy, and more flexible rules of evidence and discovery. ADR can also be faster and cheaper than going to court.  

Do You Have a Franchise Dispute? Contact Counxel Legal Firm

Franchisee opportunities often come in a simple package, but they have many complexities. Unfortunately, the complexities do not always become apparent until after the franchisee has signed and started to operate the franchise business.

We regularly assist franchise owners in growing their business and help with disputes with the franchisor. If you need to evaluate a franchise opportunity, if you have found that your franchise opportunity is running into issues, or if you are coming to the end of your franchise term and you do not know what to do, then it is time to get help. Counxel Legal Firm has experience helping franchisees get the best possible outcomes for their situation.

Please contact us today at 480-536-6122 or at intake@wordpress-457010-3165254.cloudwaysapps.com so we can help with your franchise dispute!

This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact intake@wordpress-457010-3165254.cloudwaysapps.com or 480-536-6122 to request specific information for your situation.

*Conveniently located off the 101 Freeway and the US 60 in the middle of Phoenix, Scottsdale, Tempe, Chandler, Gilbert, Mesa, and Queen Creek!