System-Wide Disputes

System-wide issues require the best franchise trial lawyers. Carmen and his team are among the best in the country.

System-wide disputes can threaten the continued viability of a brand. Most often, these cases involve contract or fraud issues on steroids – i.e., the same claim or controversy may affect the entire system or many franchisees or dealers in particular markets. These cases arise in numerous ways, usually stemming from change that may be sought or unsought, and which can create opportunity, anxiety, risk, and increased costs – all at once.

Among the system-wide matters Carmen has handled are:

  • Representation of the National Owners Association (of McDonald’s franchisees) in negotiations with the franchisor arising from its Big Bolder Vision 2020 program that led to system-wide opposition by its franchisees.
  • Representation of the national independent association (and numerous state franchisee associations) of an iconic national brand in litigation seeking declaratory and injunctive relief against “coerced concept changes.” The franchisor sought to require its franchisees to convert their units into a new brand with higher costs and unproven business results. Lawsuit forced franchisor to substantially retreat from its mandates.
  • Representation of five franchisees against patented building construction franchise for breaching the implied covenant of good faith and fair dealing by failing to keep current with evolving building code standards and unfair pricing of mandatory supply product purchases. Claims in arbitration caused the franchisor to remedy building code deficiencies and gave franchisees new franchise agreements containing an express duty of good faith and fair dealing as well as express protections against unfair pricing.
  • Successful representation of members of an independent franchisee association (which the firm created for the clients) in test case challenges to a lawn-care franchisor’s attempt to change the terms of franchise agreement as franchisees came up for renewal.
  • Defense of a national pizza franchisor from allegations by its largest franchisee that it committed commercial negligence in the failed roll-out of a new deep dish pizza product. Carmen had previously represented the franchisee who owned the entire Chicago market of a national steakhouse concept in alleging that the franchisor committed commercial negligence in the failed roll-out of a new salad and pasta bar concept.
  • System-wide issues require the very best franchise lawyers. If you are facing a system-wide issue either urgently or on the horizon we invite you to contact us.

Other system-wide disputes in which Carmen has advised clients include:

  • Brand decline and damage,
  • Attempts by franchisees to “collectively bargain” the franchise agreement,
  • National and regional advertising issues,
  • Market withdrawals,
  • Mergers between competitors,
  • Sales of the franchise system,
  • System-wide challenges to the enforceability of non-competes, and
  • Threats to the business model from consumer or public interest organizations or governmental regulators.