For Franchisees

It is simple to say that the primary interest of franchisees is financial. Every franchisee goes into the business expecting it to be profitable. Commonly, prospective franchisees assume that owning a franchise is tantamount to a guarantee of financial success, particularly if the franchise system has an established presence in the market. It is not unusual for prospective franchisees to have little understanding of the nature of franchises or of the legal relationship between franchisees and franchisors.

We provide a variety of legal and advisory services for prospective and current franchisees. Our services for franchisees include:

• The acquisition, sale, or renewal of the franchise
• The establishment of franchises of foreign systems within Canada
• Understanding and structuring franchise advertisement with respect to programs and materials
• Comprehensive advisory and legal assistance during the purchase of a franchise
• Representation and assistance in case of a dispute between the franchisor and the franchisee

A franchisee is considered to be a small business owner, and he or she is responsible for leadership and structuring within the business. The franchisee is required to adhere to specific guidelines, restrictions, and requirements of the franchisor. Without the assistance of a seasoned lawyer, many first time franchisees enter into agreements without fully understanding their own obligations and rights. We guide the client through the process, including the development and maintenance of a mutually productive relationship with the franchisor.

We are sensitive to the fact that prospective franchisees are not always sophisticated business people and provide our general advice and guidance in helping you understand the unique nature of the franchise relationships and in reviewing the franchise documentation to ensure that your interests are protected. We have a uniquely well-rounded knowledge of the topic, with extensive experience representing franchisors as well as franchisees.

Franchisee Services

• Business/legal aspects of buying a franchise, including review of disclosure documents
• Resales and renewals
• Structuring advertising funds programs and materials

Franchise Relationship Services

• Addressing relationship problems and advising on ways to enhance franchise and distribution relationships
• Defaults, terminations and transfers
• Establishing, structuring, organizing and advising Franchisor Advisory Councils
• Establishing, structuring, organizing and advising Franchisee Associations
• Insolvency issues
• The obligations imposed on the franchise relationship by Franchise Legislation

Franchise Litigation Services

• Legal proceedings to obtain or defend claims for injunctive relief to enforce termination rights, restrictive covenants
• Protection of trade-name, trade-mark, domain name rights and other intellectual property rights
• Representing franchisors, franchisee associations and franchisees with their disputes through negotiation, mediation, arbitration (all forms of alternative dispute resolution mechanisms) or litigation regarding all aspects of the franchise relationship including breaches of the statutory duty of fair dealing pursuant to Franchise Legislation
• Representing franchisors and franchisees in class and representative action

If you have questions regarding the purchase, sale, or ownership of a franchise based business, please contact our office at 855-324-3944 or via email at dkornhauser@msmlaw.ca.

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