Franchise and Distribution

Carlton Fields provides experienced counsel and assistance with creating, managing,
licensing, protecting and enforcing franchised business relationships, product distribution systems and dealership networks. Our professional objective is to help clients form and maintain productive, long-term business relationships through which they can continue providing consumer products and services to the public on a regional, national and international basis. Franchise, distributor and dealer relationships need to be specifically defined by contracts in which the owner of the proprietary business system or product line licenses independent contractors the right to provide services or sell products using the owner’s proven business format, trademarks, commercial goodwill and trade secrets for an on-going fee during a term of years. Franchising is the most highly regulated of these three business alternatives. The sale of franchised business opportunities can only be made with offering documents and contracts that comply, both in terms of form and content, with the controlling federal and state franchise investment laws. Non-compliance with these laws, even if unintentional and innocent, may create serious liability and result in having to defend against complex legal actions brought by the franchise purchasers or the regulatory authorities, or both. Typically these actions will seek rescission of the underlying contracts, the return of all franchise and royalty fees received, money damages and other statutory relief such as payment of attorneys fees, court costs, fines and penalties.

We work as a team to provide the highest quality of legal services in an efficient, cost-effective and personalized manner. Our attorneys are experienced in working with both franchisors (suppliers and manufacturers) and franchisees (distributors and dealers) through all stages of their formation, development, expansion and maintenance of business relationships, including conversions, transfers, terminations and dispute resolution.

Carlton Fields’ Franchise and Distribution Practice Group has experience in:

• Franchise structure and growth
• Franchise litigation and distribution
• Financial counseling and restructuring
• Intellectual property
• International tax structuring
• International franchise and distribution laws

Our team provides extensive experience and full service for high end and cutting edge transactional work relating to franchises and distribution. Other examples of the services we offer clients include the following:

• Counsel regarding the application and avoidance of local, state, federal and international franchise regulations
• Structure and document distribution systems and networks
• Negotiate, prepare, and enforce development, distribution, and sales agreements
• Prepare covenants not to compete
• Provide advice on antitrust issues relating to franchise and distribution systems, including FTC regulations and enforcement policies
• Advise on all relevant tax issues
• Recommend strategies for trademark and trade secret protection
• Enforce post-termination provisions of distribution agreements
• Termination of distribution arrangements

Our attorneys have developed extensive expertise in international distribution agreements. Recent agreements have been prepared for products in:

• Turkey
• Czech Republic
• Korea
• Russia
• New Zealand
• Norway
• Denmark
• Sweden
• EU
• Nigeria
• Benin
• Latin America (various countries)

Business Counseling

Our goal is to help you form and maintain productive, long-term business relationships through which you can continue providing products and services on a regional, national and international basis. We provide full-service legal compliance programs that include the structuring, registration and updating of franchise offering documents throughout the United States. We prepare all required federal and state-specific disclosure provisions and draft all contracts necessary to establish, protect and enforce franchised business relationships. We maintain the on-going disclosure, reporting and registration renewal needs of our clients in strict compliance with all the federal and state laws that govern their franchise, distributor and dealer relationships. Our firm also represents clients whose businesses involve special industry laws that regulate the distribution of motor vehicles, petroleum products, farm equipment and alcoholic beverages.

Dispute Resolution

Our practice in the area of franchise, distributor, and dealership dispute resolution includes negotiation, mediation, arbitration and litigation in matters involving terminations, covenants not to compete, trademark infringement, wrongful use and theft of intellectual properties, breach of contract, tortious business conduct, and statutory violations including fraud and misrepresentation. Specifically, we represent franchisors in both federal and state courts to enforce post-termination provisions of franchise agreements, to prevent disclosure of confidential information, and to stop the wrongful use of trademarks and intellectual properties by terminated franchisees, as appropriate through civil court actions or equitable demands for injunctive relief, or both. We also represent franchisees, dealers and distributors seeking enforcement of their contracts, prevention of wrongful terminations, and remedies for harms caused by violations of the federal and state franchise investment laws.