Franchise Lawyer California

California’s vibrant economy and diverse population make it a hub for franchising. From the bustling food scene of the Bay Area to the sprawling retail centers of Southern California, franchisees play a critical role in the state’s commercial landscape. However, the franchise relationship is often fraught with legal complexities and a power imbalance. As a franchisee, you are an independent business owner, but a rigid, one-sided contract and the rules of a large corporate system also bind you.

At Luther Lanard, PC, our franchise lawyer California law firm levels the playing field. With offices in California, Pennsylvania, and Florida, we exclusively represent franchisees, ranging from single-unit operators to multi-unit corporations with hundreds of locations worldwide. We do not represent franchisors, so our focus is always on protecting your interests. Our franchise lawyer California law firm will guide you through every stage of the franchise journey, providing you with the legal protection you need to thrive.

Why Franchisees in California Face Unique Legal Challenges

California is one of the most heavily regulated states regarding franchising. In addition to federal franchise laws enforced by the Federal Trade Commission (FTC), California imposes its own requirements under the California Franchise Investment Law (CFIL) and the California Franchise Relations Act (CFRA). These laws govern disclosure obligations, termination rights, and fair dealing between franchisors and franchisees.

For instance, the CFIL requires franchisors to register with the state and provide prospective franchisees with a comprehensive Franchise Disclosure Document (FDD) at least 14 days before a sale. The FDD is a dense document, often over 200 pages, and filled with critical information. Without legal guidance, franchisees may miss hidden risks buried in the fine print.

These regulations provide stronger rights for franchisees, but they also create legal complexity. Issues such as termination, non-renewal, encroachment, and fraud often arise. Navigating them successfully requires a California franchise attorney with in-depth knowledge of state and federal law.

Protecting Your Franchise with Strategic Agreements

Entering a franchise agreement is one of the most significant financial decisions you will ever make. The franchise agreement is a long-term, binding contract that dictates nearly every aspect of your business, from what you sell to how you market it. We provide proactive legal services to help you start your business on the right foot.

Franchise Legal Review and Negotiation

A thorough review of the FDD and franchise agreement is essential before signing on the dotted line. We analyze all 23 items of the FDD, paying close attention to critical details like fees, litigation history, and the franchisor’s financial health. We also review the franchise agreement to identify potential risks and negotiate for better terms where possible. For example, we will look for:

Vague or subjective performance standards that a franchisor could use to justify a termination
Overly broad or restrictive non-compete clauses that are generally unenforceable under Business and Professions Code § 16600
Disputes over territorial rights and the franchisor’s ability to encroach on your territory
Unfavorable renewal terms that could force you to sign a new, less favorable agreement

Protecting your investment starts here. Our meticulous review empowers you to make informed decisions and reduces the risk of costly disputes later.

Multi-Unit Agreements

A multi-unit or area development agreement can seem like a great opportunity if you are a seasoned entrepreneur looking to expand your portfolio with multiple franchise units. However, these agreements come with additional legal obligations and risks. We help franchisees understand the development schedule, financial commitment, and potential consequences of missed benchmarks before they sign.

Business Formation and Investment Due Diligence

The legal entity you choose for your franchise has significant implications for your liability and tax obligations. We guide you through the process of forming the right business entity to protect your personal assets. We also conduct investment due diligence to help you make an informed decision about the franchise opportunity. This includes a deep dive into the franchisor’s FDD, a review of their litigation history, and an analysis of their financial statements to help you assess your investment’s long-term viability.

Lease Review and Negotiation

The lease for your franchise location is often the second most important contract you will sign. A bad lease can be a huge liability. We review and negotiate the terms of your lease to protect your interests, including:

Termination clauses that align with your franchise agreement’s term
Personal guarantees that could expose your personal assets
Permitted use clauses that restrict your ability to adapt your business
Tenant improvement allowances and other financial details

Our goal is to secure a lease that aligns with your franchise obligations while giving you room to operate profitably.

Buying and Selling Franchises

We provide comprehensive legal support whether you are looking to acquire an existing franchise or sell your current one. We negotiate purchase agreements, conduct due diligence on buyers, and help ensure franchisor approval is properly managed.

Resolving Disputes and Protecting Your Rights

When the relationship with your franchisor sours, the stakes are high. Franchise disputes can threaten your business, livelihood, and personal assets. We are aggressive and strategic courtroom advocates, ready to protect your rights through litigation, arbitration, or mediation.

Breach of Contract

A breach of contract occurs when one party fails to fulfill their obligations under the franchise agreement. Common examples in franchising include:

A franchisor’s failure to provide promised support, training, or advertising
A franchisor’s unilateral changes to the franchise system or operations manual
A franchisee’s alleged failure to maintain brand standards or pay royalties

We analyze the terms of your agreement, gather evidence of the breach, and pursue legal action to recover damages or enforce the contract’s terms.

Fraud and Unfair Trade Practices

Franchisors are legally obligated to be truthful in their FDD and during the sales process. Unfortunately, some franchisors make false or misleading statements to induce a franchisee to invest. This can be the basis for a claim of fraud or misrepresentation.

We also pursue claims under California’s Unfair Competition Law and other unfair trade practice statutes. We help franchisees who relied on false or misleading information to make their investment decision to seek rescission of the agreement and recover their losses.

Termination and Non-Renewal

Franchise termination is concerning for many business owners. In California, the CFRA provides franchisees with significant protections against wrongful termination or non-renewal. A franchisor must have good cause to terminate a franchise, and in many cases, they must give the franchisee a reasonable opportunity to cure the default.

We fight for franchisees facing wrongful termination and help them enforce their rights under the CFRA. We seek remedies that could include damages or the fair market value of the business.

Exiting a Franchise

Sometimes, the best path forward is to get out. Whether due to a dispute, poor performance, or simply a desire to move on, exiting a franchise can be complex. We assist franchisees in negotiating a mutual termination agreement with the franchisor, selling the business to a third party, or pursuing legal action to achieve a favorable exit. We can help you navigate the tricky post-termination obligations and non-compete clauses to ensure a clean break.

Franchise Encroachment

Franchise encroachment occurs when a franchisor or another franchisee places a new location too close to an existing one, cannibalizing the first franchisee’s sales. While some franchise agreements grant franchisors the right to do this, many others provide territorial protections. We scrutinize your franchise agreement and FDD to determine your rights and take action to stop the encroachment and recover damages.

Lease Disputes

Lease disputes can arise with your landlord or the franchisor, who may be your sub-landlord. These disputes can involve everything from eviction notices and rent increases to maintenance issues and common area charges. We leverage our knowledge of both real estate and franchise law to protect your rights as a commercial tenant.

Misclassification and Outside General Counsel

The franchise relationship is based on the franchisee being an independent contractor, not an employee. However, some franchisors exert so much control over the franchisee’s operations that they blur the lines, leading to potential misclassification claims.

We help franchisees navigate this complex area of the law, especially in the context of disputes. We also serve as outside general counsel in California for established multi-unit franchisees, providing ongoing legal advice on a wide range of business issues to help them avoid disputes and protect their bottom line.

Association and Class Action Claims

There is strength in numbers when an issue affects multiple franchisees. We represent franchisee associations and have extensive experience in bringing and defending class action lawsuits. If your franchisor’s conduct has harmed a large group of franchisees, a class action can be an effective way to hold them accountable and achieve a system-wide resolution.

A Regional Focus on California’s Diverse Markets

California is not a single market, but a collection of diverse and distinct regions, each with its own unique challenges and opportunities. We understand the local legal and business environment in each of these areas, allowing us to provide tailored and effective representation.

North Coast and Shasta Cascade: These regions, with their more rural and independent economies, present unique challenges. Franchisees here may face issues related to market saturation and remote support from the franchisor.
San Francisco Bay Area: The Bay Area’s high cost of living and competitive business environment make lease disputes, real estate issues, and investment due diligence paramount for franchisees.
Gold Country and High Sierra: Franchisees in these recreational and historical areas often face seasonal fluctuations and unique business formation needs to protect their assets.
Central Valley: As the agricultural heartland of California, the Central Valley presents a different set of challenges, including issues related to local labor laws and regional economic downturns.
Central Coast: Franchisees on the Central Coast face a unique mix of tourism-driven business and local community dynamics. Lease negotiations and brand protection are key concerns.
Los Angeles County: As a major metropolitan area, L.A. County is a microcosm of franchising, with issues ranging from complex lease disputes and misclassification claims to aggressive franchise encroachment.
Orange County and San Diego County: The business environment in these areas is often highly competitive, leading to a higher risk of franchise encroachment and unfair trade practices.
Inland Empire: With its rapid population growth, the Inland Empire is a prime location for new franchises, but this can also lead to a higher incidence of disputes related to business formation, FDD misrepresentations, and breach of contract.

No matter where you are in California, we are here to provide the legal support you need to succeed. We have represented clients worldwide, from single-unit owners working to support their families to corporate entities operating hundreds of locations. Your success is our success.

Why Franchisees Choose Our California Franchise Lawyers

Many franchisees choose our team at Luther Lanard, PC, for compelling reasons anchored in our mission, creative knowledge, and unwavering commitment to their success. Here is what sets us apart:

Unwavering Commitment to Franchisees: We exclusively represent franchisees, making your interests our top priority. Our focus is on solving legal issues for franchisees.
Seasoned Authorities in Franchise Law with Real-World Insight: With more than 50 years of combined franchise law experience, our team brings a powerful advantage. Our background includes roles as in-house counsel for a franchisor, giving us unique insight into how franchisors think and negotiate, and empowering us to turn that knowledge into advocacy for our clients.
Strategic Creativity and Litigation Readiness: Our approach blends creativity with tenacity. We seek win-win solutions wherever possible, leveraging our experience of strategic negotiation and willingness to escalate matters through arbitration or litigation to achieve your objectives.
Results-Driven with Real Impact: We have secured over $20 million in judgments and settlements for franchisee clients.
Passionate Advocates for the Franchisee Dream: Franchising is a way for individuals to build businesses and support families. Your success is our purpose.
Responsive, Proactive, and Cost-Aware: We understand that business problems do not wait, and neither do we. Our team responds quickly, works proactively to resolve issues efficiently, and keeps you fully informed about your options and potential costs.

When you choose our firm, you gain a trusted partner dedicated to protecting your investment, defending your rights, and helping your franchise thrive for the long term.

Contact Our Franchise Lawyer California Law Firm

Luther Lanard, PC, is here to protect your rights, whether you are reviewing a new franchise opportunity, expanding into multiple units, or facing a dispute with your franchisor. We have represented franchisees worldwide, from single-unit owners to corporations with hundreds of locations, and we are ready to put our experience to work for you. Contact our California franchise lawyers today to schedule a consultation and discuss your case.