International Law

Franchisee Compliance Due Diligence

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Richard Solomon writes, over at BMM, about what franchise disclosure really amounts to.

"Franchise agreements became much stricter in providing for franchisor options.

Business information management technology exponentialized in its ability to "report".

What was always thought of as an inherent abrasive interface between a franchisorand its franchisees became a hostile divide.

Franchisees who previously believed they had been provided everything worth paying for in the first twelve months and spent the rest of their term looking for a way out, now frequently don't last for much more than twelve months as franchise offerings have become more and more just make believe, hype driven guaranteed failure.

The fraud issues in franchising became the front page, and the relationship opportunism issues, with few exceptions, took a back seat.

The antitrust law view of sole source requirements, formerly known as illegal tying, became lawful with the Chicago school analysis of the Jefferson Parish case.

Since then, all you have to do is disclose up front that that is how it is going to be, and you're home free, legally at least."

As long as you disclose the pig you are going to be, you have satisifed the franchise disclosure laws.

The art is in those tricky disclosures, making the pig franchisor appear palatable to the franchisee rube.

Full post as published by Misleading Advertising Law on September 08, 2008 (boomark / email).