Distribution & Franchise

Franchise and distribution law frequently overlap, but Foley treats each area as a separate area of law in order to serve the specific needs of those businesses with distribution networks, and those with national or international franchise networks. In both models, product distribution law has become increasingly complex over the years, involving overlapping (and often contradictory) federal and state laws. 

Strength in Both Distribution and Franchise Law

Franchisor Rights

We represent franchisors across a variety of industries. We help businesses set up franchise systems from the creation of the franchise disclosure document (FDD), drafting and enforcing franchise agreements, and insuring compliance with the myriad of federal and state regulations. We also advise clients who wish simply to license their trademarks or business methods and avoid accidentally becoming a franchisor. We also routinely represent franchisors before federal and state government agencies.

Franchise Financing

We help franchises obtain financing from banks and government authorities like the Small Business Administration (SBA). Notably, we have litigated against the SBA in connection with its denial of forgiveness of loans to franchisors from the Paycheck Protection Program (PPP).

Franchise Insolvency and Bankruptcy

Unfortunately, franchisees sometimes become insolvent and even seek protection from the bankruptcy courts. We advise franchisors on how to protect themselves from the adverse impacts of a franchisee bankruptcy. We aim to be proactive and maximize a franchisor’s rights in these challenging situations.

Franchisee/Distributor/Dealer Termination

Sometimes franchise and distribution relationships do not work out, and one of the parties may wish to terminate the relationship. We help navigate these situations and advise franchisors and franchisee groups on their rights. We interpret termination clauses in franchise agreements and provide strategies for how franchisors and franchisee networks can proceed to protect their interests.

Joint Employer & Employee Misclassification

We represent franchisors against allegations that they have misclassified their franchisees as independent contractors rather than employees. We have defended against such claims from private plaintiffs and the US Department of Labor. These attacks threaten the very foundation of any franchise system: the right of franchisors to treat their franchisees as independently owned and operated businesses.

Commercial Solutions

Franchisors, manufactures, and suppliers face a range of legal issues related to their businesses, whether negotiating mergers and acquisitions, brokering supply chain agreements, arranging financing, or navigating labor and employment issues. We offer our clients a full range of commercially focused legal advice in all of these core areas and more.

Government Solutions

Federal and state government agencies have taken a far more active interest in both franchise and manufacturing businesses. Our government solutions teams help clients navigate this tricky, relationship driven area. Whether a client needs help lobbying state or local governments, getting access to critical information about forthcoming legislation, or assistance complying with government contracting or procurement policies, our legal and government solutions teams can be of service.

Regulatory Compliance

Manufacturers, suppliers, and franchisors face a bevy of state, federal, and international regulatory compliance issues. We help our clients navigate these issues, whether they relate to tariffs or sanctions, administrative agencies, state distributor or dealer laws, and beyond.

Terms of Purchase and Sale

The basic terms and conditions that apply to the sale of products can become vitally important, especially in an era of supply chain uncertainty. We help manufacturers, suppliers, and franchisors design terms and conditions for the purchase, sale, and re-sale of their products that maximize profitability and minimize legal risk.

Performance Measurement / Management Systems

We help franchisors, manufacturers, and suppliers build effective performance measurement programs to ensure that they get the most out of their franchise, dealer, and distributor networks, and are able to manage the sales channel effectively.

Warranty Programs

We help manufacturers and suppliers structure and manage effective warranty programs for their products, including navigating the difficulties of handling warranty reimbursements, holding dealers and distributors accountable for providing quality service to end users, and complying with state and federal warranty statutes such as the Magnuson-Moss Warranty Act.

Comprehensive Representation

Our product distribution and franchise lawyers offer:

• Cross-disciplinary legal teams with comprehensive solutions
• Proactive risk identification/management
• Transparency in matter management, fees, and client communication
• Efficient use of technology
• Up-to-date and relevant thought leadership

National Coverage for Manufacturers, Distributors, and Franchisors

When dispute resolution is necessary, we are ready. We have litigated or arbitrated on behalf of clients in all 50 states.

Whatever the need, the overarching goal of Foley’s product distribution and franchise practice group is to help build beneficial and productive relationships between manufacturers, franchisors, suppliers, and distributors.

Smiley Face Map

Foley’s Distribution & Franchise Practice Group offers its clients an interactive electronic resource for up-to-date information on distribution and franchise laws in every U.S. state (as well as Puerto Rico and the Virgin Islands). To access the map, go to map.foley.com.