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Texas franchisees may face a variety of legal issues, including breach of contract, franchise encroachment, misclassification, unfair trade practices, lease disagreements, and challenges when exiting a franchise. Resolving these disputes requires an understanding of both franchise law and local Texas regulations.
Franchisees also encounter numerous legal agreements throughout their business journey. These include franchise agreements, business formation documents, multi-unit expansion contracts, purchase or sale agreements, leases, and investment due diligence materials. Each agreement carries specific obligations and potential risks that must be carefully reviewed to protect your business interests.
At Luther Lanard, PC, our skilled franchise lawyer Dallas TX law firm can represent you in every aspect of franchise law. From negotiating contracts and reviewing documents to handling disputes and litigation, our team ensures that your rights are fully protected every step of the way. We provide personalized guidance so you can focus on growing and operating your franchise with confidence.
Why Our Franchise Lawyer Dallas Law Firm Should Represent You
At Luther Lanard, PC, we represent franchisees throughout the Metroplex, providing strong legal guidance for every stage of your business. Our team includes lawyers with previous experience as general counsel and corporate counsel for franchisors, and we use that insider knowledge to protect and advocate for our franchisee clients.
Proactive Legal Counsel
As a franchise owner, you can’t simply wait and see what happens. At Luther Lanard, PC, we anticipate problems before they arise, taking a proactive approach to ensure your business remains protected. Our lawyers respond quickly to obstacles facing your franchise, offering practical solutions that address both big and small issues.
Crafting the Best Possible Solution
We also help franchisees understand their options and make informed decisions by clearly explaining potential costs and outcomes. From negotiating contracts and leases to addressing various business disputes that arise, we craft the best solutions tailored to your specific situation.
Ready to Represent Franchisees in Litigation
When necessary, our team is fully prepared to litigate in the court system to protect your interests. Our proactive approach, combined with our deep knowledge of franchisor operations, has helped us obtain over $20 million in judgments and settlements for our clients.
Choosing our law firm means partnering with Dallas franchise lawyers who are committed to solving problems, protecting your rights, and guiding you confidently through the challenging world of franchising across the Metroplex.
What Types of Disputes Do Dallas Franchisees Encounter?
Franchisees in Dallas-Fort Worth can become involved in various types of business disputes, including the following:
Breach of Contract
Franchise disputes often arise when either party fails to fulfill contractual obligations. Common examples include failure to provide promised training, marketing support, or supply of products. Franchisees may also allege that the franchisor violated terms regarding territory exclusivity, royalties, or renewal rights. Resolving breach of contract disputes typically involves reviewing the franchise agreement’s specific language and determining whether either party failed to meet its obligations. Legal remedies can include damages, contract enforcement, or termination of the agreement.
Fraud and Unfair Trade Practices
Franchisees may encounter situations where a franchisor engages in deceptive or misleading business practices. This can include providing false financial projections, exaggerating potential profits, or hiding operational risks. Under Texas law, franchisees may pursue claims under statutes addressing fraud and unfair trade practices if they can demonstrate intentional misrepresentation or omission of critical information that influenced their decision to invest. These disputes often require detailed documentation and expert testimony to prove financial harm caused by the franchisor’s actions.
Franchise Encroachment
Franchise encroachment occurs when a franchisor allows another franchise location to open too close to an existing franchise, potentially harming sales and market share. Franchise agreements often contain territorial protection clauses, but disputes arise if these clauses are vague, ignored, or inadequately enforced. Franchisees can seek legal remedies if a franchisor breaches territorial rights, though proving financial harm can sometimes be complicated. In some cases, disputes may involve the renegotiation of territorial limits or compensation for lost revenue.
Misclassification
Franchisees may sometimes be misclassified as independent contractors rather than employees, or vice versa, creating disputes regarding taxes, benefits, and operational responsibilities. Misclassification can also affect liability, workers’ compensation, and compliance with labor laws. Resolving these disputes requires analyzing the actual nature of the working relationship versus how it is defined in agreements. Legal claims may involve wage and hour violations, benefits entitlement, or tax-related remedies, depending on the classification outcome.
Exiting a Franchise
Disputes can emerge when franchisees attempt to exit their franchise early, whether due to financial hardship, operational challenges, or conflicts with the franchisor. Franchise agreements often contain strict exit procedures, including notice periods, transfer rights, and financial obligations. Conflicts arise when a franchisor refuses a buyout, enforces non-compete clauses, or imposes penalties beyond the agreed terms. Resolving these disputes may require negotiation, arbitration, or litigation to enforce or contest exit terms.
Lease Disputes
Many franchise operations involve leased commercial space, which can create conflicts if landlords, franchisees, or franchisors disagree over lease terms. Common issues include rent increases, lease termination rights, and property maintenance responsibilities. Franchisees may need to negotiate with both landlords and franchisors when disputes arise, and legal action may be necessary if leases are breached or ambiguous.
Association and Class Actions
Franchisees may also band together to address widespread grievances through associations or class action lawsuits. Common subjects include royalty disputes, deceptive advertising practices, and unfair contractual obligations. Collective legal action can provide leverage against franchisors, but organizing a class or association requires demonstrating shared claims and measurable damages. Such disputes often involve coordination among multiple franchisees and extensive legal documentation to support claims.
Settling vs. Litigating Franchise Disputes
Franchise disputes in Dallas-Fort Worth can be resolved either through settlement or by pursuing litigation in court. The choice depends on the challenges of the dispute, the strength of the evidence, and the willingness of both parties to negotiate.
Settlement
Settlement involves reaching an agreement outside of court, often through direct negotiations or mediation. The potential advantages of settlement include:
- Lower Costs – Avoids the high lawyer fees and court costs of a full trial.
- Faster resolution – Disputes can often be resolved in weeks or months.
- Privacy – Settlement terms are usually confidential, keeping disputes out of the public record.
- More Control Over the Outcome – Both parties can craft mutually acceptable solutions rather than having a judge decide.
The business settlement process may consist of:
- Informal Negotiations – Lawyers for both sides exchange proposals and counteroffers.
- Mediation – A neutral mediator facilitates discussions, helping parties find common ground.
- Settlement Agreement – A written document outlines the terms, including payments, contract changes, or business transfers.
- Court Approval (If Applicable) – If a lawsuit is pending, the court may formally approve and dismiss the case.
Litigation
Litigation is the process of resolving disputes through the Dallas County courts or federal court when applicable. Potential advantages of litigation include:
- Binding Decision – A judge or jury issues a final ruling.
- Legal Precedent – Court decisions may clarify franchise rights and obligations.
- Discovery Rights – Each side can compel the other to produce documents and testimony.
The litigation process involves:
- Filing the Lawsuit – The plaintiff files a petition in the appropriate court.
- Service of Process – The defendant is formally notified of the lawsuit.
- Discovery – Both sides exchange evidence, take depositions, and submit interrogatories.
- Pre-Trial Motions – Requests for the judge to decide issues before trial.
- Trial – Both sides present evidence and arguments; the judge or jury delivers a verdict.
- Appeals – The losing party may challenge the decision in a higher court.
Choosing between settlement and litigation requires evaluating the dispute’s urgency, cost implications, and potential business impact. Many parties attempt settlement first, but prepare for litigation if negotiations fail. Our franchise lawyers in Dallas can advise you on what option would be best given your situation.
Types of Legal Agreements Franchisees Encounter
Franchise Legal Review
Before signing a franchise agreement in Dallas, franchisees often engage in a legal review to understand the rights, responsibilities, and restrictions involved. This process can include:
- Examining the Franchise Disclosure Document (FDD) for compliance with federal and Texas laws
- Reviewing obligations for royalties, advertising contributions, and operational standards
- Identifying clauses that limit territory, control suppliers, or impose penalties for early termination
Business Formation
Selecting the correct business structure in Dallas is an essential legal step for franchisees. Common structures include:
- Limited Liability Company (LLC) – Offers liability protection with flexible tax options.
- Corporation – Provides strong liability protection but has more formal requirements.
- Partnership – Less formal but offers fewer protections.
Legal agreements for formation outline ownership, management rights, and how profits and losses are shared.
Buying and Selling a Franchise
The purchase or sale of a franchise involves detailed legal agreements that address:
- Purchase price and payment terms
- Transfer of franchise rights, including franchisor approval
- Obligations to train the new owner or assist with the transition
- Assumption or termination of existing leases and contracts
Multi-Unit Agreements
Dallas franchisees seeking to operate more than one location may sign a multi-unit agreement, which can include:
- Timelines for opening each additional unit
- Territory protections for the franchisee
- Requirements for staffing, training, and operational oversight
These agreements often require significant upfront investment and long-term commitments.
Leases
Commercial leases in Dallas often require careful legal negotiation to protect the franchisee’s interests. Key provisions can address:
- Length of lease and renewal options
- Rent escalation clauses
- Responsibility for repairs, utilities, and insurance
- Rights to assign or sublease if the franchise is sold
Investment Due Diligence
Before investing in a franchise, due diligence agreements outline the process for evaluating the opportunity. This may involve:
- Reviewing historical financial performance of other franchise locations
- Analyzing market competition and demographic trends in Dallas
- Confirming compliance with all zoning, licensing, and regulatory requirements
Due diligence helps franchisees make informed decisions and can reduce investment risks.
How Our Experienced Franchise Lawyers Can Represent You
At Luther Lanard, PC, our Dallas franchise lawyers have the knowledge and experience to guide franchisees through every stage of their business journey. Whether you are launching your first location, expanding to multiple units, or facing a legal dispute, we can protect your rights and position your business for success.
Review of Franchise-Related Documents
We begin by carefully reviewing all franchise-related documents, including the Franchise Disclosure Document (FDD) and the franchise agreement. Our lawyers explain your obligations, highlight potential risks, and negotiate favorable terms with the franchisor to protect your financial investment.
Selection of the Right Business Entity
We can also help you select the best business entity for liability protection and tax efficiency, whether that is an LLC, corporation, or partnership. Our team prepares and files all of the necessary formation documents in compliance with Texas law, ensuring that your business starts on a solid legal foundation.
Assistance with Purchasing a Franchise
If you are purchasing a franchise, we will handle the legal aspects of the transaction, including due diligence, purchase agreements, and transfer approvals. If you are selling, we can prepare the necessary documentation, manage franchisor requirements, and protect your financial interests throughout the process.
Help with Multi-Unit Agreements
For franchisees planning to operate more than one location, our lawyers negotiate multi-unit agreements that secure territory rights, establish realistic opening schedules, and safeguard your control over business operations.
Negotiation of Commercial Leases
We can also negotiate commercial leases to ensure favorable terms for rent, renewal options, and maintenance responsibilities. Our goal is to protect your occupancy rights and prevent unexpected costs that can impact your profitability.
Representation When Disputes Occur
If conflicts arise—such as breach of contract, encroachment, or unfair trade practices—we represent you during negotiations, mediation, arbitration, or litigation. Our approach is strategic and focused on achieving the best possible outcome for your business.
Continued Counsel for Your Growing Franchise
As your business grows, we will remain your trusted legal resource, handling contract updates, compliance issues, and expansion strategies. Our commitment is to provide long-term guidance so you can focus on running your franchise with confidence.
With Luther Lanard, PC, Dallas franchisees gain a legal partner who understands the franchise landscape and will handle every legal detail on their behalf.
Contact Our Franchise Lawyer Dallas TX Law Firm
At Luther Lanard, PC, we are prepared to aggressively advocate for your business interests and develop solutions for disputes and other issues that arise in your franchise. For a case evaluation and legal consultation with our experienced franchise lawyer Dallas TX law firm please contact us online for more information.